CASES FOR CRITICAL THINKING

CASE 1A
Trader Joe's Keeps Things Fresh

The average Trader Joe's stocks only a small percentage of the products of local supermarkets in a space little larger than a corner store. How did this neighborhood market grow to earnings of $9 billion, garner superior ratings, and become a model of management? Take a walk down the aisles of Trader Joe's and learn how sharp attention to the fundamentals of retail management made this chain more than the average Joe.

From Corner Store to Foodie Mecca

In more than 365 stores across the United States, hundreds of thousands of customers are treasure hunting.¹ Driven by gourmet tastes but hungering for deals, they are led by cheerful guides in Hawaiian shirts who point them to culinary discoveries such as ahi jerky, ginger granola, and baked jalapeño cheese crunchies.

It's just an average day at Trader Joe's, the gourmet, specialty, and natural-foods store that offers staples such as milk and eggs along with curious, one-of-a-kind foods at below average prices in thirty-odd states.² With their plethora of kosher, vegan, and gluten-free fare, Trader Joe's has products to suit every dietary need.³ Foodies, hipsters, and recessionistas alike are attracted to the chain's charming blend of low prices, tasty treats, and laid-back but enthusiastic customer service. Shopping at Trader Joe's is less a chore than it is immersion into another culture. In keeping with its whimsical faux-nautical theme, crew members and managers wear loud tropical-print shirts. Chalkboards around every corner unabashedly announce slogans, such as “You don't have to join a club, carry a card, or clip coupons to get a good deal.”

“When you look at food retailers,” says Richard George, professor of food marketing at St. Joseph's University, “there is the low end, the big middle, and then there is the cool edge—that's Trader Joe's.”⁴ But how does Trader Joe's compare with other stores with an edge, such as Whole Foods? Both obtain products locally and from all over the world. Each values employees and strives to offer the highest quality. However, there's no mistaking that Trader Joe's is cozy and intimate, whereas the spacious stores of Whole Foods offer an abundance of choices. By limiting its stock and selling quality products at low prices, Trader Joe's sells twice as much per square foot as other supermarkets.⁵ Most retail megamarkets, such as Whole Foods, carry between 25,000 and 45,000 products; Trader Joe's stores carry only 4,000.⁶ But this scarcity benefits both Trader Joe's and its customers. According to Swarthmore professor Barry Schwartz, author of The Paradox of Choice: Why Less Is More, “Giving people too much choice can result in paralysis. . . . [R]esearch shows that the more options you offer, the less likely people are to choose any.”⁷

David Rogers of DSR Marketing Systems expects other supermarkets to follow the Trader Joe's model toward a smaller store size. He cites several reasons, including excessive competitive floor space, development costs, and the aging population.⁸

Named by Fast Company as one of this year's 50 Most Influential Companies, Trader Joe's didn't always stand for brie and baguettes at peanut butter and jelly prices.⁹ In 1958, the company began life in Los Angeles as a chain of 7-Eleven-style corner stores called Pronto Markets. Striving to differentiate his stores from those of his competitors in order to survive in a crowded marketplace, founder “Trader” Joe Coulombe, vacationing in the Caribbean, reasoned that consumers are more likely to try new things while on vacation. In 1967 the first Trader Joe's store opened in Pasadena, California. Mr. Coulombe had transformed his stores into oases of value by replacing humdrum sundries with exotic, one-of-a-kind foods priced persuasively below those of any reasonable competitor.¹⁰ In 1979, he sold his chain to the Albrecht family, German billionaires and owners of an estimated 8,700 Aldi markets in the United States, Europe, and Australia.¹¹

The Albrechts shared Coulombe's relentless pursuit of value—a trait inseparable from Trader Joe's success. Recent annual sales are estimated at $9 billion, landing Trader Joe's in the top third of Supermarket News's Top 75 Retailers.¹² Because it's not easy competing with such giants as Whole Foods and Dean & DeLuca, the company applies its pursuit of value to every facet of management. By keeping stores comparatively small—they average about 10,000 to 15,000 square feet—and shying away from prime locations, Trader Joe's keeps real estate costs down.¹³ The chain prides itself on its thriftiness and cost-saving measures, proclaiming “Every penny we save is a penny you save” and “Our CEO doesn't even have a secretary.”¹⁴

Trader Giotto, Trader José, Trader Ming, and Trader Darwin

Trader Joe's strongest weapon in the fight to keep costs low may also be its greatest appeal to customers: its stock. The company follows a deliciously simple approach to stocking stores: (1) search out tasty, unusual foods from all around the world; (2) contract directly with manufacturers; (3) label each product under one of several catchy house brands; and (4) maintain a small stock, making each product fight for its place on the shelf. This common-sense, low-overhead approach to retail serves Trader Joe's well, embodying its commitment to aggressive cost cutting.

Most Trader Joe's products are sold under a variant of its house brand—dried pasta under the “Trader Giotto's” moniker, frozen enchiladas under the “Trader Jose's” label, vitamins under “Trader Darwin's,” and so on. But these store brands don't sacrifice quality—readers of Consumer Reports awarded Trader Joe's house brands top marks.¹⁵ The house brand success is no accident. According to Trader Joe's President Doug Rauch, “the company pursued the strategy to put our destiny in our own hands.”¹⁶

But playing a role in this destiny is no easy feat. Ten to fifteen new products debut each week at Trader Joe's—and the company maintains a strict “one in, one out” policy. Items that sell poorly or whose costs rise get the heave-ho in favor of new blood, something the company calls the “gangway factor.”¹⁷ If the company hears that customers don't like something about a product, out it goes. In just such a move, Trader Joe's phased out single-ingredient products (such as spinach and garlic) from China. “Our customers have voiced their concerns about products from this region and we have listened,” the company said in a statement, noting that items would be replaced with “products from other regions until our customers feel as confident as we do about the quality and safety of Chinese products.”¹⁸

Conversely, discontinued items may be brought back if customers are vocal enough, making Trader Joe's the model of an open system. “We feel really close to our customers,” says Audrey O'Connell, vice president of marketing for Trader Joe's East. “When we want to know what's on their minds, we don't need to put them in a sterile room with a swinging bulb. We like to think of Trader Joe's as an economic food democracy.”¹⁹ In return, customers keep talking, and they recruit new converts. Word-of-mouth advertising has lowered the corporation's advertising budget to approximately 0.2 percent of sales, a fraction of the 4 percent spent by supermarkets.²⁰

Customer Connection

Trader Joe's connects with its customers because of the culture of product knowledge and customer involvement that its management cultivates among store employees. Each employee is encouraged to taste and learn about the products and to engage customers to share what they've experienced. Most shoppers recall instances when helpful crew members took the time to locate or recommend particular items. Despite the lighthearted tone suggested by marketing materials and in-store ads, Trader Joe's aggressively courts friendly, customer-oriented employees by writing job descriptions highlighting desired soft skills (“ambitious and adventurous, enjoy smiling and have a strong sense of values”) as much as actual retail experience.²¹

A responsible, knowledgeable, and friendly “crew” is critical to Trader Joe's success. Therefore, it nurtures its employees with a promote-from-within philosophy, and its employees earn more than their counterparts at other chain grocers. In California, Trader Joe's employees can earn almost 20 percent more than counterparts at supermarket giants Albertsons or Safeway.²² Starting benefits include medical, dental, and vision insurance; company-paid retirement; paid vacation; and a 10 percent employee discount.²³ Assistant store managers earn a compensation package averaging $94,000 a year, and store managers' packages average $132,000. One analyst estimates that a Walmart store manager earning that much would need to run an outlet grossing six or seven times that of an average Trader Joe's.²⁴

Outlet managers are highly compensated, partly because they know the Trader Joe's system inside and out (managers are hired only from within the company). Future leaders enroll in training programs such as Trader Joe's University that foster in them the loyalty necessary to run stores according to both company and customer expectations, teaching managers to imbue their part-timers with the customer-focused attitude shoppers have come to expect.²⁵

For all of its positive buzz, Trader Joe's narrowly avoided a boycott recently when it became embroiled in a controversy over its opposition to the Campaign for Fair Food, an initiative organized by the Coalition of Immokalee Workers (CIW) to push for better wages and working conditions in Florida's produce fields.²⁶ Trader Joe's insisted that it already followed the guidelines stipulated by the Fair Food campaign, but the CIW demanded increased transparency. Trader Joe's finally signed an agreement with the CIW in February 2012, mere days before the nationally organized boycott of its stores was scheduled to begin.²⁷

If Trader Joe's has any puzzling trait, it's that the company is more than a bit media shy. Executives have granted no interviews since the Aldi group took over. Company statements and spokespersons have been known to be terse—the company's leases even stipulate that no store opening may be formally announced until a month before the outlet opens!²⁸

The future looks bright for Trader Joe's. In 2012, between twenty-five and thirty locations are slated to open, and the company continues to break into markets hungry for reasonably priced gourmet goodies. But will Trader Joe's struggle to sustain its international flavor in the face of rising fuel costs and shrinking discretionary income, or will the allure of cosmopolitan food at provincial prices continue to tempt consumers?

Review Questions

1. Does Trader Joe's seem to be basing its management practices on a solid understanding of human behavior in organizations? Is the company on track for valuing employees in a way that is good for them and for organizational performance over the long term? What weaknesses can you spot in the current approach that might cause problems in the future?
2. In what ways does this description of Trader Joe's show attention to each responsibility in the management process: planning, organizing, leading, and controlling?
3. New employee situation. At the age of twenty-two and newly graduated from college, Hazel has just accepted a job with Trader Joe's as a shift leader. She'll be supervising four team members who fill part-time jobs in the produce section. Given Trader Joe's casual and nontraditional work environment, what should she do and avoid doing in the first few days of work to establish herself as a skillful manager of this team?
4. Global Economy Situation. Trader Joe's is owned by a German company operating in America. What are the biggest risks that international ownership poses for the people who make a career commitment to Trader Joe's as their employer?

Discussion Questions

1. How does Trader Joe's design jobs for increased job satisfaction and higher performance?
2. In what ways does Trader Joe's demonstrate the importance of each responsibility in the management process: planning, organizing, leading, and controlling?
3. Describe the methods that show Trader Joe's knows the importance of human capital.
4. Does Trader Joe's utilize contingency thinking? Why or why not?
5. Research Question. What do the blogs and current news reports say? Is Trader Joe's a management benchmark for others to follow? In what areas relevant to Organizational Behavior does the firm have an edge on the competition?

CASE IB
Getting the Evidence: Leadership Training Dilemma

Developed by John R. Schermerhorn, Jr., Ohio University

Shane Alexander is the human resource director of the Central State Medical Center. One of her responsibilities is to oversee the hospital's leadership training programs. Recently Shane attended a professional conference during which a special “packaged” training program was advertised for sale. The package includes a set of videotaped lectures by a distinguished management consultant plus a workbook containing readings, exercises, cases, tests, and other instructional aids. The subjects covered in the program include motivation, group dynamics, communication skills, leadership styles, performance appraisal, and the dynamics of planned change.

In the past Shane felt that the hospital had not lived up to its training goals. One of the reasons for this was the high cost of hiring external consultants to do the actual instruction. This packaged program was designed, presumably, so that persons from within the hospital could act as session coordinators. The structure of the program provided through the videotapes and workbook agenda was supposed to substitute for a consultant's expertise. Because of this, Shane felt that use of the packaged program could substantially improve supervisory training in the hospital.

The cost of the program was $3,500 for an initial purchase of the videotapes plus fifty workbooks. Additional workbooks were then available at $8 per copy. Before purchasing the program, Shane needed the approval of the senior administrative staff.

At the next staff meeting, Shane proposed purchasing the training program. She was surprised at the response. The hospital president was noncommittal; the vice president for operations was openly hostile; and the three associate vice presidents were varied in their enthusiasm. It was the vice president's opinion that dominated the discussion. He argued that to invest in such a program on the assumption that it would lead to improved leadership practices was unwise. “This is especially true in respect to the proposed program,” he said. “How could such a package possibly substitute for the training skills of an expert consultant?”

Shane argued her case and was left with the following challenge. The executives would allow $1,000 to be spent to rent the program with thirty workbooks. It would be up to Shane to demonstrate through a trial program, or pilot test, that an eventual purchase of the full program would be worthwhile.

There are 160 supervisors, team leaders, department and division heads, and executives in the hospital. The program was designed to be delivered in eight 2.5-hour sessions. It was preferred to schedule one session per week, with no more than fifteen participants per session. Shane knew that she would have to present very strong evidence to gain needed support for the continued use of the program. Given the opportunity, she wondered just how she could get evidence that would be conclusive one way or the other.

Review Questions

1. If you were Shane, what type of research design would you use to test this program? Why?
2. How would the design actually be implemented in this hospital setting?
3. What would be your research hypothesis? What variables would you need to measure to provide data that could test this hypothesis? How would you gather these data?
4. Do you think the administrator's request for “proof before purchase” was reasonable? Why or why not?

CASE 2
Diversity Leads the Way

At Xerox, Diversity equals Success. The equation certainly has worked for the company! According to Fortune magazine's annual reputation survey, Xerox is the world's most admired company in the computer industry. According to Anne Mulcahy, Xerox former Chairman and CEO, the firm's focus on diversity is based on an environment of inclusion within which each person can achieve to their highest potential. Xerox knows that employees with different ways of thinking, and different ways of perceiving the world, are employees who create innovative solutions. In a business like Xerox, whose lifeblood is fresh ideas, this variety of perspectives is a priceless resource—and a key to achieving critical business results.¹

With recent annual revenue of $23+ billion, Xerox is the world's largest technology-and-services company specializing in document management.² Xerox provides the document industry's broadest portfolio of offerings. Digital systems include color and black-and-white printing and publishing systems, digital presses and “book factories,” advanced and basic multifunction systems, laser and solid ink network printers, copiers, and fax machines. No competitor can match Xerox's services expertise, which includes helping businesses develop online document archives, analyzing how employees can most efficiently share documents and knowledge in the office, operating in-house print shops or mailrooms, and building Web-based processes for personalizing direct mail, invoices, brochures, and more. Xerox also offers associated software, support, and even supplies such as toner, paper, and ink.³

By recognizing and respecting diversity and empowering individuality, Xerox creates productive people and an innovative company. This corporate culture of inclusion with its commitment to diversity can be traced back to its very first chairman, Joseph C. Wilson. Chairman Wilson took proactive steps to create a more diverse workforce in response to race riots in the 1960s. With then Xerox President C. Peter McCullough, Wilson called for increased hiring of African Americans in an effort to achieve equality among its workforce. Starting in the 1970s, Xerox established an internal affirmative action office and began to hire a significant number of minority employees.⁴

Xerox placed emphasis on the advancement of minorities and females in the 1980s. It was during this time that Barry Rand, an African American, was named the first minority president of a division. Xerox's Balanced Workforce Strategy (BWF) aimed to achieve unbiased representation for women and minorities throughout the organization at all times, including throughout times of restructuring. During the influx of women into its workforce Xerox recognized women's struggle to balance work and family commitments. In response, Xerox Human Resources (HR) initiated “flex time” and other HR policies to maintain a high level of productivity and satisfaction among its workforce.⁵

In the 1990s sexual orientation was included in the company's Equal Opportunity/Affirmative Action and Non-discrimination policy; GALAXe Pride at Work (a caucus group for gay, lesbian, bisexual, and transgender employees) was established; and Xerox began to provide domestic partner benefits for gay, lesbian, bisexual, and transgender employees. Annual diversity employee roundtables with senior managers were initiated, providing employees the opportunity to engage in unfiltered communication with management about the best practices, strengths, and weaknesses of Xerox's diversity initiatives.⁶

Xerox's view on a diverse workforce is most eloquently expressed by former Chairman Anne M. Mulcahy:

I'm convinced diversity is a key to success. Experience tells us that the most diverse companies—companies ruled by a hierarchy of imagination and filled with people of all ages, races, and backgrounds—are the most successful over time. Somehow, diversity breeds creativity. Maybe it's because people with different backgrounds challenge each other's underlying assumptions, freeing everybody from convention and orthodoxy. We provide a shining proof point that diversity in all its wonderful manifestations is good for business . . . good for our country . . . and good for people.⁷

Xerox is proud to say that women and minorities make up more than 50 percent of its workforce. About 48.2 percent of Xerox senior executives are women, people of color, or both. The employee roster is made up of roughly 30 percent African Americans, Latinos, Asians, and Native Americans. In fact, Xerox has been rated by Fortune, Forbes, Working Mother, Latino Style, and Enable magazines as one of the top ten companies in hiring minorities, women, disabled, and gay and lesbian employees. It is among Working Mother's top 100 family-friendly companies for women—and has been for the past fifteen years.⁸

In 2007 Ursula Burns was named the first African-American female president of Xerox Corporation. In July 2009 she succeeded Anne M. Mulcahy as CEO, the first female-to-female hand-off in Fortune 500 history. In May 2010 Burns was also named chairman, heading a company of over 140,000 employees. Her philosophy is consistent with the company culture and history. She says:

The power of our people development model is that it recognizes the value of diversity from entry-level positions to the top seats. When you've been at it as long as we have, the bench gets pretty strong of next generation leaders who represent the real world: black, white, male, female, Hispanic, Asian from different religions and with different beliefs. What they all have in common is strong skills, a solid work ethic, commitment and a will to win.⁹

With Ursula Burns at the helm, and a 100 percent rating on the Human Rights Campaign Foundation's Corporate Equality Index and its Best Places to Work survey, there's no doubt about it: Xerox's commitment to diversity is still going strong.¹⁰ In a difficult global environment and highly competitive industry, Burns's leadership will surely be tested to the fullest in the days ahead.

Review Questions

1. How would Xerox define diversity? How has its definition changed over the years?
2. What are the seven reasons why Xerox should be motivated to diversify its workforce? Illustrate how Xerox shows it values workplace diversity.
3. Does Xerox embody or defy the “leaking pipeline” phenomenon? Why?
4. Research Question. Compare Xerox to other Fortune 500 companies. How are women and minorities represented at the highest levels of each organization? How can these statistics be improved upon?

CASE 3
OB Classic: The Jim Donovan Case

This classic case is by Allan R. Cohen and Michael Merenda, University of New Hampshire¹

Jim Donovan, age thirty-seven, the new president and chief executive officer of Famous Products, was suddenly in the toughest spot in his life. He had just been selected by Omega Corporation, a huge conglomerate, to take over as president of its latest acquisition! And Jim had been feeling very good about himself.

Having grown up on “the wrong side of the tracks,” worked his way through engineering college, earned an MBA from Harvard Business School, worked for ten years as a management consultant and two years as a successful president of a small company, Jim felt that he had arrived. The company he was going to manage was known throughout the world, had a good reputation, and would provide a good opportunity for visibility in the parent company.

The pay would be the highest he had ever earned, and while the money itself was not that important (though he'd be able to ensure financial security for his wife and four children), he enjoyed the indicator of success that a high salary provided. Jim also was eager to manage a company with over a thousand employees; the power to get things done on such a large scale was very attractive to him.

When Omega selected him, Jim had been told that Don Bird, the current president of Famous Products, was close to retirement and would be moved upstairs to chairman of the board. Bird had been president of Famous for twenty-two years and had done reasonably well, building sales steadily and guarding quality.

The top management group was highly experienced, closely knit, very loyal to the company, and its members had been in their jobs for a long time. As long-term employees, they all were reported to be good friends of Don Bird. They were almost all in their early sixties and quite proud of the record of their moderate-size but successful company.

Famous had not, however, grown in profits as rapidly as Omega expected of its operating companies, and Omega's president had told Jim that we wanted Jim to “grab a hold of Famous and make it take off.”

With this challenge ringing in his ears, Jim flew out to Milwaukee for his first visit to Famous Products. He had talked briefly with Don Bird to say that he'd be arriving Thursday for half a day, then would be back for good after ten days in New York at Omega. Bird had been cordial but rather distant on the phone, and Jim wondered how Bird was taking Jim's appointment. “I've only got a few hours here,” thought Jim. “I wonder how I should play it.”

When Jim pulled up to Famous Products headquarters in his rented car, he noticed the neat grounds and immaculate landscaping. To his surprise, Don Bird met him at the door.

Bird had on a very conservative blue business suit, black tie, black shoes, and white shirt. He peered out at Jim through old-fashioned steel-rimmed glasses and said, “Welcome to our plant. You're just in time for our usual Thursday morning executive meeting. Would you like to sit in on that and meet our people?” Jim thought that the meeting would give him a chance to observe the management group in action, and he readily agreed, planning to sit back and watch for as long as he could.

Jim was ushered into the most formal meeting room he could remember ever having seen. The dark-paneled room was dominated by a long, heavy table, with twelve high-backed chairs around it. Seven of the chairs were filled with unsmiling executives in dark suits.

Bird led Jim to the front of the room, indicated an empty chair to the left of the seat at the head of the table, then sat down in the place that was obviously his. Turning to the group, he said:

Gentlemen, I want you to meet Mr. Donovan, but before I turn the meeting over to him, I want you to know that I do not believe he should be here; I do not believe he's qualified, and I will give him no support. Mr. Donovan. . . .

Review Questions

1. How well did Jim Donovan “play” things in terms of his new appointment? What mistakes did he make, and why did he make them?
2. Now that Jim Donovan is in the meeting and on the spot, what should he do (a) immediately, (b) right after the meeting ends, and (c) within the first few days of taking over?
3. How have perceptions influenced behavior in this situation? How could those perceptions have been better managed?

CASE 4
Tough Situation at MacRec, Inc.

Developed by Mary McGarry, Empire State College, and Barry R. Armandi, SUNY-Old Westbury

Background

MagRec, Incorporated was started by Mr. Leed, a brilliant engineer (he has several engineering patents) who was a group manager at Fairchild Republic. The company's product was magnetic recording heads, a crucial device used for reading, writing, and erasing data on tapes and disks.

Like any other start-up, MagRec had a humble beginning. It struggled during the early years, facing cash-flow and technical problems. After a slow start, it grew rapidly and gained 35 percent of the tape head market, making it the second-largest supplier in North America. Financially, the company suffered heavily because of price erosions caused by Far East competition. Unlike all its competitors, the company resisted moving its manufacturing operations offshore. But the company accumulated losses to a point of bankruptcy. Finally MagRec entered a major international joint venture and received many new sales orders. Things looked good again. But. . . .

Pat's Dilemma

When Fred Marsh promoted me to sales manager, I was in seventh heaven. Now, six months later, I feel I am in hell. This is the first time in my life that I am really on my own. I have been working with other people all my life. I tried my best and what I could not solve, I took upstairs. Now it's different because I am the boss (or am I?). Fred has taught me a lot. He was my mentor and gave me this job when he became vice president. I have always respected him and listened to his judgment. Now, thinking back, I wonder whether I should have listened to him at all on this problem.

It started late one Friday evening. I had planned to call my West Coast customer, Partco, to discuss certain contract clauses. I wanted to nail this one fast (Partco had just been acquired by Volks, Inc.). Partco was an old customer. In fact, through good and bad, it had always stayed with us. It was also a major customer. I was about to call Partco when Dinah Coates walked in, clutching a file. I had worked with Dinah for three years. She was good. I knew that my call to Partco would have to wait. Dinah had been cleaning out old files and came across a report about design and manufacturing defects in Partco heads. The report had been written nine years ago. The cover memo read as follows:

To: Ken Smith, Director of Marketing
From: Rich Grillo, V.P. Operations
Sub: Partco Head Schedule

This is to inform you that due to pole-depth problems in design, the Partco heads (all 514 in test) have failed. They can't reliably meet the reading requirements. The problem is basically a design error in calculations. It can be corrected. However, the fix will take at least six months. Meanwhile, Ron Scott in production informs me that the entire 5,000 heads (the year's production) have already been pole-slotted, thus they face the same problem.

Ken, I don't have to tell you how serious this is, but how can we OK and ship them to Partco knowing that they'll cause read error problems in the field? My engineering and manufacturing people realize this is the number-one priority. By pushing the Systems Tech job back we will be back on track in less than six months. In the interim I can modify Global Widgets heads. This will enable us to at least continue shipping some product to Partco. As a possible alternate I would like to get six Partco drives. Michaels and his team feel that with quick and easy changes in the drives tape path, they can get the head to work. If this is true we should be back on track within six to eight weeks.

A separate section of the report reads as follows:

Confidential

(Notes from meeting with Don Updyke and Rich Grillo)

Solution to Partco heads problem

All Partco heads can be reworked (.8 hrs. ea.—cost insignificant) to solve Partco's read problems by grinding an extra three-thousandths of an inch off the top of the head. This will reduce the overall pole depth to a point where no read errors occur. The heads will fully meet specifications in all respects except one, namely life. Don estimates that due to the reduced chrome layer (used for wear) the heads' useful life will be 2500 hours instead of 6000 hours of actual usage.

Our experience is that no customer keeps accurate records to tell actual usage and life. Moreover, the cost is removed since Partco sells drives to MegaComputer, who sells systems to end-users. The user at the site hardly knows or rarely complains about extra costs such as the replacement of a head 12 to 18 months down the line instead of the normal 2 years. Besides, the service technicians always innovatively believe in and offer plausible explanations—such as the temperature must be higher than average—or they really must be using the computer a lot.

I have directed that the heads be reworked and shipped to Partco. I also instructed John to tell Partco that due to inclement weather this week's shipment will be combined with next week's shipment.

Dinah was flabbergasted. The company planned to sell products deliberately that it knew would not meet life requirements—“risking our reputation as a quality supplier,” she said. “Partco and others buy our heads thinking they are the best. Didn't we commit fraud through outright misrepresentation?”

Dinah insisted I had to do something. I told her I would look into the matter and get back to her by the end of next week.

Over the weekend I kept thinking about the Partco issue. We had no customer complaints. Partco had always been extremely pleased with our products and technical support. In fact, we were its sole suppliers. MegaComputer had us placed on the preferred, approved ship to stock, vendors list. It was a fact that other vendors were judged against our standards. MegaComputer's Quality Control never saw our product or checked it.

Monday morning I showed the report to Fred. He immediately recollected it and began to explain the situation to me.

MagRec had been under tremendous pressure and was growing rapidly at the time. “That year we had moved into a new 50,000-square-foot building and went from 50 or 60 employees to over 300. Our sales were increasing dramatically.” Fred was head of purchasing at the time, and every week the requirements for raw materials would change. “We'd started using B.O.A.s (Broad Order Agreements, used as annual purchasing contracts) guaranteeing us the right to increase our numbers by 100 percent each quarter. The goal was to maintain the numbers. If we had lost Partco then, it could have had a domino effect and we could have ended up having no customers left to worry about.”

Fred went on to explain that it had only been a short-term problem that was corrected within the year and no one ever knew it existed. He told me to forget it and to move the file into the back storage room. I conceded. I thought of all the possible hassles. The thing was ancient history anyway. Why should I be concerned about it? I wasn't even here when it happened.

The next Friday Dinah asked me what I had found out. I told her Fred's feelings on the matter and that I felt he had some pretty good arguments regarding the matter. Dinah became angry. She said I had changed since my promotion and that I was just as guilty as the crooks who had cheated the customers by selling low-life heads as long-life heads. I told her to calm down. The decision was made years ago. No one got hurt, and the heads weren't defective. They weren't causing any errors.

I felt bad but figured there wasn't much to do. The matter was closed as far as I was concerned, so I returned to my afternoon chores. Little was I to know the matter was not really closed.

That night Fred called me at 10:00. He wanted me to come over to the office right away. I quickly changed, wondering what the emergency was. I walked into Fred's office. The coffee was going. Charlie (Personnel Manager) was there. Rich Grillo (V. P. Operations) was sitting on the far side of Fred's conference table. I instinctively headed there for that was the designated smoking corner.

Ken (Director of Marketing) arrived fifteen minutes later. We settled in. Fred began the meeting by thanking everyone for coming. He then told them about the discovery of the Partco file and filled them in on the background. The problem now was that Dinah had called Partco and gotten through to their new vice president, Tim Rand. Rand had called Fred at 8:00 p.m. at home and said he was personally taking a red-eye flight to find out what this was all about. He would be here in the morning. We spent a grueling night followed by an extremely tense few weeks. Partco had a team of people going through our tests, quality control, and manufacturing records. Our production slipped, and overall morale was affected.

Mr. Leed personally spent a week in California assuring Partco that this would never happen again. Though we weathered the storm, we had certain losses. We were never to be Partco's sole source again. We still retained 60 percent of its business but had to agree to lower prices. The price reduction had a severe impact. Although Partco never disclosed to anyone what the issues were (since both companies had blanket nondisclosure agreements), word got around that Partco was paying a lower price. We were unable to explain to our other customers why Partco was paying this amount. Actually I felt the price word got out through Joe Byrne (an engineer who came to Partco from Systems Tech and told his colleagues back at Systems Tech that Partco really knew how to negotiate prices down). He was unaware, however, of the real issues. Faced with customers who perceived they were being treated inequitably, we experienced problems. Lowering prices meant incurring losses; not lowering them meant losing customers. The next two financial quarters saw sales revenue decline by 40 percent. As the sales manager, I felt pretty rotten presenting my figures to Fred.

With regard to Dinah, I now faced a monumental problem. The internal feeling was that she should be avoided at all costs. Because of price erosions, we faced cutbacks. Employees blamed her for production layoffs. The internal friction kept mounting. Dinah's ability to interface effectively with her colleagues and other departments plummeted to a point where normal functioning was impossible.

Fred called me into his office two months after the Partco episode and suggested that I fire Dinah. He told me that he was worried about results. Although he had nothing personally against her, he felt that she must go because she was seriously affecting my department's overall performance. I defended Dinah by stating that the Partco matter would blow over and given time I could smooth things out. I pointed out Dinah's accomplishments and stated I really wanted her to stay. Fred dropped the issue, but my problem persisted.

Things went from bad to worse. Finally, I decided to try to solve the problem myself. I had known Dinah well for many years and had a good relationship with her before the incident. I took her to lunch to address the issue. Over lunch, I acknowledged the stress the Partco situation had put on her and suggested that she move away for a while to the West Coast, where she could handle that area independently.

Dinah was hurt and asked why I didn't just fire her already. I responded by accusing her of causing the problem in the first place by going to Partco.

Dinah came back at me, calling me a lackey for having taken her story to Fred and having brought his management message back. She said I hadn't even attempted a solution and that I didn't have the guts to stand up for what was right. I was only interested in protecting my backside and keeping Fred happy. As her manager, I should have protected her and taken some of the heat off her back. Dinah refused to transfer or to quit. She told me to go ahead and fire her, and she walked out.

I sat in a daze as I watched Dinah leave the restaurant. What the heck went wrong? Had Dinah done the morally right thing? Was I right in defending MagRec's position? Should I have taken a stand with Fred? Should I have gone over Fred's head to Mr. Leed? Am I doing the right thing? Should I listen to Fred and fire Dinah? If not, how do I get my department back on track? What am I saying? If Dinah is right, shouldn't I be defending her rather than MagRec?

Review Questions

1. Place yourself in the role of the manager. What should you do now? After considering what happened, would you change any of your behaviors?
2. Do you think Dinah was right? Why or why not? If you were she and had it to do all over again, would you do anything differently? If so, what and why?
3. Using cognitive dissonance theory, explain the actions of Pat, Dinah, and Fred.

CASE 5
“It Isn't Fair . . .”

Developed by Barry R. Armandi, SUNY-Old Westbury

Mary Jones was in her senior year at Central University and interviewing for jobs. Mary was in the top 1 percent of her class, active in numerous extracurricular activities, and highly respected by her professors. After the interviews, Mary was offered positions with every company with which she interviewed. After much thought, she decided to take the offer from Universal Products, a multinational company. She felt that the salary was superb ($40,000), the benefits were excellent, and potential for promotion was good.

Mary started work a few weeks after graduation and learned her job assignments and responsibilities thoroughly and quickly. Mary was asked on many occasions to work late because report deadlines were often moved forward. Without hesitation she said, “Of course!” even though as an exempt employee she would receive no overtime.

Frequently she would take work home with her and use her personal computer to do further analyses. At other times she would come into the office on weekends to monitor the progress of her projects or just to catch up on the ever-growing mountain of correspondence.

On one occasion, her manager asked her to take on a difficult assignment. It seemed that the company's manufacturing facility in Costa Rica was having production problems. The quality of one of the products was highly questionable, and the reports on the matter were confusing. Mary was asked to be part of a team to investigate the quality and reporting problems. The team stayed in poor accommodations for the entire three weeks they were there. This was because of the plant's location near its resources, which happened to be in the heart of the jungle. Within the three-week period, the team had located the source of the quality problem, corrected it, and altered the reporting documents and processes. The head of the team, a quality engineer, wrote a note to Mary's manager stating the following: “Just wanted to inform you of the superb job Mary Jones did down in Costa Rica. Her suggestions and insights into the reporting system were invaluable. Without her help we would have been down there for another three weeks, and I was getting tired of the mosquitoes. Thanks for sending her.”

Universal Products, like most companies, has a yearly performance review system. Since Mary had been with the company for a little over one year, it was time for her review. Mary entered her manager's office nervous, since this was her first review ever and she didn't know what to expect. After closing the door and exchanging the usual pleasantries, her manager, Tom, got right to the point.

Tom: Well, Mary, as I told you last week this meeting would be for your annual review. As you are aware, your performance and compensation are tied together. Since the philosophy of the company is to reward those who perform, we take these reviews very seriously. I have spent a great deal of time thinking about your performance over the past year, but before I begin I would like to know your impressions of the company, your assignments, and me as a manager.

Mary: Honestly, Tom, I have no complaints. The company and my job are everything I was led to believe. I enjoy working here. The staff are all very helpful. I like the team atmosphere, and my job is very challenging. I really feel appreciated and that I'm making a contribution. You have been very helpful and patient with me. You got me involved right from the start and listened to my opinions. You taught me a lot, and I'm very grateful. All in all I'm happy being here.

Tom: Great, Mary. I was hoping that's the way you felt because from my vantage point, most of the people you worked with feel the same. But before I give you the qualitative side of the review, allow me to go through the quantitative appraisal first. As you know, the rankings go from one (lowest) to five (highest). Let's go down each category, and I'll explain my reasoning for each.

Tom starts with category one (Quantity of Work) and ends with category ten (Teamwork). In each of the categories, Tom has either given Mary a 5 or a 4. Indeed, only two categories have a 4, and Tom explains these are normal areas for improvement for most employees.

Tom: As you can see, Mary, I was very happy with your performance. You have received the highest rating I have ever given any of my subordinates. Your attitude, desire, and help are truly appreciated. The other people on the Costa Rica team gave you glowing reports, and speaking with the plant manager, she felt that you helped her understand the reporting system better than anyone else. Since your performance has been stellar, I'm delighted to give you a 10 percent increase effective immediately!

Mary: (mouth agape, and eyes wide) Tom, frankly I'm flabbergasted! I don't know what to say, but thank you very much. I hope I can continue to do as fine a job as I have this last year. Thanks once again.

After exchanging some parting remarks and some more thank-yous, Mary left Tom's office with a smile from ear to ear. She was floating on air! Not only did she feel the performance review process was uplifting, but her review was outstanding and so was her raise. She knew from other employees that the company was only giving out a 5 percent average increase. She figured that if she got that, or perhaps 6 or 7 percent, she would be happy. But to get 10 percent. Wow!! Imagine. . . .

Sue: Hi, Mary! Lost in thought? My, you look great. Looks like you got some great news. What's up?

Susan Stevens was a recent hire, working for Tom. She had graduated from Central University also, but a year after Mary. Sue had excelled while at Central, graduating in the top 1 percent of her class. She had laudatory letters of recommendation from her professors and was into many after-school clubs and activities.

Mary: Oh, hi, Sue! Sorry, but I was just thinking about Universal and the opportunities here.

Sue: Yes, it truly is. . . .

Mary: Sue, I just came from my performance review, and let me tell you, the process isn't that bad. As a matter of fact I found it quite rewarding, if you get my drift. I got a wonderful review, and can't wait till next year's. What a great company!

Sue: You can say that again! I couldn't believe them hiring me right out of college at such a good salary. Between you and me, Mary, they started me at $45,000. Imagine that? Wow, was I impressed. I just couldn't believe that they would . . . Where are you going, Mary? Mary? What's that you say? “It isn't fair?” What do you mean? Mary? Mary. . . .

Review Questions

1. Indicate Mary's attitudes before and after meeting Sue. If there was a change, why?
2. What do you think Mary will do now? Later?
3. What motivation theory applies best to this scenario? Explain.

CASE 6A
Perfect Pizzeria, or Not?

Perfect Pizzeria in Southville, in deep southern Illinois, is the second-largest franchise of the chain in the United States. The headquarters is located in Phoenix, Arizona. Although the business is prospering, employee and managerial problems exist.

Each operation has one manager, an assistant manager, and from two to five night managers. The managers of each pizzeria work under an area supervisor. There are no systematic criteria for being a manager or becoming a manager trainee. The franchise has no formalized training period for the manager. No college education is required. The managers for whom the case observer worked during a four-year period were relatively young (ages twenty-four to twenty-seven), and only one had completed college. They came from the ranks of night managers or assistant managers, or both. The night managers were chosen for their ability to perform the duties of the regular employees. The assistant managers worked a two-hour shift during the luncheon period five days a week to gain knowledge about bookkeeping and management. Those becoming managers remained at that level unless they expressed interest in investing in the business.

The employees were mostly college students, with a few high school students performing the less-challenging jobs. Since Perfect Pizzeria was located in an area with few job opportunities, it had a relatively easy task of filling its employee quotas. All the employees, with the exception of the manager, were employed part time and were paid the minimum wage.

The Perfect Pizzeria system is devised so that food and beverage costs and profits are computed according to a percentage. If the percentage of food unsold or damaged in any way is very low, the manager gets a bonus. If the percentage is high, the manager does not receive a bonus; rather, he or she receives only his or her normal salary.

There are many ways in which the percentage can fluctuate. Since the manager cannot be in the store twenty-four hours a day, some employees make up for their smaller paychecks by helping themselves to the food. When a friend comes in to order a pizza, extra ingredients are put on the friend's pizza. Occasional nibbles by eighteen to twenty employees throughout the day at the meal table also raise the percentage figure. An occasional bucket of sauce may be spilled or a pizza accidentally burned.

In the event of an employee mistake, the expense is supposed to come from the individual. Because of peer pressure, the night manager seldom writes up a bill for the erring employee. Instead, the establishment takes the loss and the error goes unnoticed until the end of the month when the inventory is taken. That's when the manager finds out that the percentage is high and that there will be no bonus.

In the present instance, the manager took retaliatory measures. Previously, each employee was entitled to a free pizza, salad, and all the soft drinks he or she could drink for every six hours of work. The manager raised this figure from six to twelve hours of work. However, the employees had received these six-hour benefits for a long time. Therefore, they simply took advantage of the situation whenever the manager or the assistant was not in the building. Although the night manager theoretically had complete control of the operation in the evenings, he did not command the respect that the manager or assistant manager did. This was because he received the same pay as the regular employees, he could not reprimand other employees, and he was basically the same age or sometimes even younger than the other employees.

Thus, apathy grew within the pizzeria. There seemed to be a further separation between the manager and his workers, who started out as a closely knit group. The manager made no attempt to alleviate the problem because he felt it would iron itself out. Either the employees that were dissatisfied would quit or they would be content to put up with the new regulations. As it turned out, a rash of employee dismissals occurred. The manager had no problem filling the vacancies with new workers, but the loss of key personnel was costly to the business.

With the large turnover, the manager found that he had to spend more time in the building, supervising and sometimes taking the place of inexperienced workers. This was in direct violation of the franchise regulation, which stated that a manager would act as a supervisor and at no time take part in the actual food preparation. Employees were not placed under strict supervision with the manager working alongside them. The operation no longer worked smoothly because of differences between the remaining experienced workers and the manager concerning the way in which a particular function should be performed.

After a two-month period, the manager was again free to go back to his office and leave his subordinates in charge of the entire operation. During this two-month period, the percentage had returned to the previous low level, and the manager received a bonus each month. The manager felt that his problems had been resolved and that conditions would remain the same, since the new personnel had been properly trained.

It didn't take long for the new employees to become influenced by the other employees. Immediately after the manager returned to his supervisory role, the percentage began to rise. This time the manager took a bolder step. He cut out any benefits that the employees had—no free pizzas, salads, or drinks. With the job market at an even lower ebb than usual, most employees were forced to stay. The appointment of a new area supervisor made it impossible for the manager to “work behind the counter,” since the supervisor was centrally located in Southville.

The manager tried still another approach to alleviate the rising percentage problem and maintain his bonus. He placed a notice on the bulletin board stating that if the percentage remained at a high level, a lie detector test would be given to all employees. All those found guilty of taking or purposefully wasting food or drinks would be immediately terminated. This did not have the desired effect on the employees because they knew if they were all subjected to the test, all would be found guilty and the manager would have to dismiss all of them. This would leave him in a worse situation than ever.

Even before the following month's percentage was calculated, the manager knew it would be high. He had evidently received information from one of the night managers about the employees' feelings about the notice. What he did not expect was that the percentage would reach an all-time high. That is the state of affairs at the present time.

Review Questions

1. Consider the situation where the manager changed the time period required to receive free food and drink from six to twelve hours of work. Try to apply each of the motivational approaches to explain what happened. Which of the approaches offers the most appropriate explanation? Why?
2. Repeat question 1 for the situation in which the manager worked beside the employees for a time and then later returned to his office.
3. Repeat question 1 for the situation as it exists at the end of the case.
4. Establish and justify a motivational program based on one or a combination of motivation theories to deal with the situation as it exists at the end of the case.

CASE 6B
OB Classic: Hovey and Beard Company

Written by James G. (Jerry) Hunt, Southern Illinois University at Carbondale

The Hovey and Beard Company manufactures a variety of wooden toys, including animals, pull toys, and the like.¹ The toys were manufactured by a transformation process that began in the wood room. There, toys were cut, sanded, and partially assembled. Then the toys were dipped into shellac and sent to the painting room.

In years past, the painting had been done by hand, with each employee working with a given toy until its painting was completed. The toys were predominantly painted with two colors, although a few required more colors. Now, in response to increased demand for the toys, the painting operation was changed so that the painters sat in a line by an endless chain of hooks. These hooks moved continuously in front of the painters and passed into a long horizontal oven. Each painter sat in a booth designed to carry away fumes and to backstop excess paint. The painters would take a toy from a nearby tray, position it in a jig inside the painting cubicle, spray on the color according to a pattern, and then hang the toy on a passing hook. The rate at which the hooks moved was calculated by the engineers so that each painter, when fully trained, could hang a painted toy on each hook before it passed beyond reach.

The painters were paid on a group bonus plan. Since the operation was new to them, they received a learning bonus that decreased by regular amounts each month.

The learning bonus was scheduled to vanish in six months, by which time it was expected that they would be on their own—that is, able to meet the production standard and earn a group bonus when they exceeded it.

By the second month of the training period, trouble developed. The painters learned more slowly than had been anticipated, and it began to look as though their production would stabilize far below what was planned. Many of the hooks were going by empty. The painters complained that the hooks moved too fast and that the engineer had set the rates wrong. A few painters quit and had to be replaced with new ones. This further aggravated the learning problem. The team spirit that the management had expected to develop through the group bonus was not in evidence except as an expression of what the engineers called “resistance.” One painter, whom the group regarded as its leader (and the management regarded as the ringleader), was outspoken in taking the complaints of the group to the supervisor. These complaints were that the job was messy, the hooks moved too fast, the incentive pay was not correctly calculated, and it was too hot working so close to the drying oven.

A consultant was hired to work with the supervisor. She recommended that the painters be brought together for a general discussion of the working conditions. Although hesitant, the supervisor agreed to this plan.

The first meeting was held immediately after the shift was over at 4:00 p.m. It was attended by all eight painters. They voiced the same complaints again: The hooks went by too fast, the job was too dirty, and the room was hot and poorly ventilated. For some reason, it was this last item that seemed to bother them most. The supervisor promised to discuss the problems of ventilation and temperature with the engineers, and a second meeting was scheduled. Over the next few days, the supervisor had several talks with the engineers. They, along with the plant superintendent, felt that this was really a trumped-up complaint and that the expense of corrective measures would be prohibitively high.

The supervisor came to the second meeting with some apprehension. The painters, however, did not seem to be much put out. Rather, they had a proposal of their own to make. They felt that if several large fans were set up to circulate the air around their feet, they would be much more comfortable. After some discussion, the supervisor agreed to pursue the idea. The supervisor and the consultant discussed the idea of fans with the superintendent. Three large propeller-type fans were purchased and installed.

The painters were jubilant. For several days the fans were moved about in various positions until they were placed to the satisfaction of the group. The painters seemed completely satisfied with the results, and the relations between them and the supervisor improved visibly.

The supervisor, after this encouraging episode, decided that further meetings might also prove profitable. The painters were asked if they would like to meet and discuss other aspects of the work situation. They were eager to do this. Another meeting was held, and the discussion quickly centered on the speed of the hooks. The painters maintained that the engineer had set them at an unreasonably fast speed and that they would never be able to fill enough of them to make a bonus.

The discussion reached a turning point when the group's leader explained that it wasn't that the painters couldn't work fast enough to keep up with the hooks but that they couldn't work at that pace all day long. The supervisor explored the point. The painters were unanimous in their opinion that they could keep up with the belt for short periods if they wanted. But they didn't want to because, if they showed they could do this for short periods, then they would be expected to do it all day long. The meeting ended with an unprecedented request by the painters: “Let us adjust the speed of the belt faster or slower depending on how we feel.” The supervisor agreed to discuss this with the superintendent and the engineers.

The engineers reacted negatively to the suggestion. However, after several meetings it was granted that there was some latitude within which variations in the speed of the hooks would not affect the finished product. After considerable argument with the engineers, it was agreed to try out the painters' idea.

With misgivings, the supervisor had a control with a dial marked “Low, Medium, Fast” installed at the booth of the group leader. The speed of the belt could now be adjusted anywhere between the lower and upper limits that the engineers had set.

The painters were delighted and spent many lunch hours deciding how the speed of the belt should be varied from hour to hour throughout the day. Within a week the pattern had settled down to one in which the first half hour of the shift was run on a medium speed (a dial setting slightly above the point marked “Medium”). The next two and a half hours were run at high speed, and the half hour before lunch and the half hour after lunch were run at low speed. The rest of the afternoon was run at high speed with the exception of the last forty-five minutes of the shift, which was run at medium.

The constant speed at which the engineers had originally set the belt was actually slightly below the “Medium” mark on the control dial; the average speed at which the painters were running the belt was on the high side of the dial. Few, if any, empty hooks entered the oven, and inspection showed no increase of rejects from the paint room.

Production increased, and within three weeks (some two months before the scheduled ending of the learning bonus) the painters were operating at 30 to 50 percent above the level that had been expected under the original arrangement. Naturally, their earnings were correspondingly higher than anticipated. They were collecting their base pay, earning a considerable piece-rate bonus, and still benefiting from the learning bonus. They were earning more now than many skilled workers in other parts of the plant.

Management was besieged by demands that the inequity between the earnings of the painters and those of other workers in the plant be rectified. With growing irritation between the superintendent and the supervisor, the engineers and supervisor, and the superintendent and engineers, the situation came to a head when the superintendent revoked the learning bonus and returned the painting operation to its original status: The hooks moved again at their constant, time-studied, designated speed. Production dropped again, and within a month all but two of the eight painters had quit. The supervisor stayed on for several months, but, feeling aggrieved, left for another job.

Review Questions

1. How does the painters' job score on the core job characteristics before and after the changes were made? How can the positive impact of the job redesign be explained?
2. Was the learning bonus handled properly in this case? How can its motivational impact be explained? What alternative approaches could have been taken with similar motivational results?
3. How do you explain the situation described in the last paragraph of the case? How could this outcome have been avoided by appropriate managerial actions?

CASE 7
The Forgotten Team Member

Developed by Franklin Ramsoomair, Wilfred Laurier University

The OB course for the semester appeared to promise the opportunity to learn, enjoy, and practice some of the theories and principles in the textbook and class discussions. Christine Spencer was a devoted, hard-working student who had been maintaining an A- average to date. Although the skills and knowledge she had acquired through her courses were important, she was also very concerned about her grades. She felt that grades were paramount in giving her a competitive edge when looking for a job and, as a third-year student, she realized that she'd soon be doing just that.

Sunday afternoon. Two o'clock. Christine was working on an accounting assignment but didn't seem to be able to concentrate. Her courses were working out very well this semester, all but the OB. Much of the mark in that course was to be based on the quality of groupwork, and so she felt somewhat out of control. She recollected the events of the past five weeks. Professor Sandra Thiel had divided the class into groups of five people and had given them a major group assignment worth 30 percent of the final grade. The task was to analyze a seven-page case and to come up with a written analysis. In addition, Sandra had asked the groups to present the case in class, with the idea that the rest of the class members would be “members of the board of directors of the company” who would be listening to how the manager and her team dealt with the problem at hand.

Christine was elected team coordinator at the first group meeting. The other members of the group were Diane, Janet, Steve, and Mike. Diane was quiet and never volunteered suggestions, but when directly asked she would come up with high-quality ideas. Mike was the clown. Christine remembered that she had suggested that the group should get together before every class to discuss the day's case. Mike had balked, saying “No way!! This is an eight-thirty class, and I barely make it on time anyway! Besides, I'll miss my Happy Harry show on television!” The group couldn't help but laugh at his indignation. Steve was the businesslike individual, always wanting to ensure that group meetings were guided by an agenda and noting the tangible results achieved or not achieved at the end of every meeting. Janet was the reliable one who would always have more for the group than was expected of her. Christine saw herself as meticulous and organized and as a person who tried to give her best in whatever she did.

It was now week five into the semester, and Christine was deep in thought about the OB assignment. She had called everyone to arrange a meeting for a time that would suit them all, but she seemed to be running into a roadblock. Mike couldn't make it, saying that he was working that night as a member of the campus security force. In fact, he seemed to miss most meetings and would send in brief notes to Christine, which she was supposed to discuss for him at the group meetings. She wondered how to deal with this. She also remembered the incident last week. Just before class started, Diane, Janet, Steve, and she were joking with one another before class. They were laughing and enjoying themselves before Sandra came in. No one noticed that Mike had slipped in very quietly and taken his seat unobtrusively.

She recalled the cafeteria incident. Two weeks ago, she had gone to the cafeteria to grab something to eat. She had rushed to her accounting class and had skipped breakfast. When she got her club sandwich and headed to the tables, she saw her OB group and joined them. The discussion was light and enjoyable as it always was when they met informally. Mike had come in. He'd approached their table. “You guys didn't say you were having a group meeting,” he blurted. Christine was taken aback.

We just happened to run into each other. Why not join us?”

Mike looked at them noncommittally. “Yeah . . . right,” he muttered, and walked away.

Sandra Thiel had frequently told them that if there were problems in the group, the members should make an effort to deal with them first. If the problems could not be resolved, she had said that they should come to her. Mike seemed so distant, despite the apparent camaraderie of the first meeting.

An hour had passed, bringing the time to 3:00 p.m., and Christine found herself biting the tip of her pencil. The written case analysis was due next week. All the others had done their designated sections, but Mike had just handed in some rough handwritten notes. He had called Christine the week before, telling her that in addition to his course and his job, he was having problems with his girlfriend. Christine empathized with him. Yet, this was a group project! Besides, the final mark would be peer evaluated. This meant that whatever mark Sandra gave them could be lowered or raised, depending on the group's opinion about the value of the contribution of each member. She was definitely worried. She knew that Mike had creative ideas that could help to raise the overall mark. She was also concerned for him. As she listened to the music in the background, she wondered what she should do.

Review Questions

1. How could an understanding of the stages of group development assist Christine in leadership situations such as this one?
2. What should Christine understand about individual membership in groups in order to build group processes that are supportive of her work group's performance?
3. Is Christine an effective group leader in this case? Why or why not?

CASE 8
Teams Drive the Fast Cars

When you think of auto racing, do you think of teamwork? Watch any televised race, and the better majority of the camera time is dedicated to the drivers and their cars. But in each of the three major forms of auto racing, the driver is simply one member of a larger team that works together to achieve maximum performance. And when the driver wins, the team wins as well.

In the world of competitive auto racing, the drivers are the sport's rock stars. They're courted by sponsors, adored by fans, and portrayed as the subject of interview upon interview by the racing press. It goes without saying that drivers are absolutely essential to earning a trophy, but racing enthusiasts, teammates, and especially drivers will tell you that they can't win the race by themselves—it takes a successful team to win a race.

Furthermore, while the driver is the most visible member of the team and certainly the one responsible for guiding the car, he's not always calling the shots. The most successful teams rely on multiple sets of eyes to assess track conditions and identify opportunities to advance that drivers themselves can't see from the cockpit.

Ray Evernham, crew chief and team manager for Hendrick Motorsports's DuPont car, describes teamwork this way: “We're all spark plugs. If one doesn't fire just right, we can't win the race. So no matter whether you are the guy that's doing the fabricating or changing tires on Sundays and that's the only job responsibility you have, if you don't do your job then we're not going to win. And no one is more or less important than you.”¹ Although three of the major forms of professional auto racing—NASCAR, Formula One, and rally car racing—each utilizes different vehicles, rules, and team structures, teamwork is the common denominator among them.

What are the qualities of successful racing teams? Let's take a look.

Nascar

NASCAR is the most widely known and watched racing sport in the United States, and the popularity and success of Jeff Gordon has more than a little to do with that. Gordon has the most wins in NASCAR's modern era, has the third-most all-time wins, and has become a spokesperson for the importance of teamwork in NASCAR racing.² NASCAR has come a long way since its origins in the late 1940s in racing stock cars purchased directly from auto dealerships. Today's NASCAR vehicles are custom fabricated from the ground up, although their thin metal bodies are molded in the shape of popular American sedans to reflect the sport's heritage. While most fans would be quick to point out the driver, manager, and pit crew as racing team members, shop mechanics, parts fabricators, and even aerodynamics experts are just as essential to a team's performance.

It's impossible for a car to complete a NASCAR race without multiple visits to the pit, and these pit stops are often the best example of teamwork in the sport. Pit crew members practice routine maintenance tasks like tire changes and refueling until they can execute them with lightning speed and the utmost precision. Aside from the skill and muscle memory of the pit crew members, other teammates contribute by modifying parts and equipment so they can be changed out in less time. Pit stops that would take mechanics twenty minutes or more to complete happen in less than twenty seconds.

Two-time Sprint Cup winner Jimmie Johnson cites the importance of cohesive teamwork even before a car is assembled and tested on the track. “If you really get inside each other's heads, as the car is developed, you're looking to split hairs,” Johnson said. “If you really know each other, then you know what each other is looking for, you've built that foundation and belief on the teammates [and] the engineers, you can split those hairs and get it right.”³

Formula One

Formula One drivers, team members, and fans have one quality that sets them apart from other racing participants: the need for speed. Formula One vehicles are the fastest circuit racing cars in the world, screaming down the track at top speeds as high as 225 miles per hour.

But there's another buzzword that equally defines Formula One racing: performance. Because of the high speeds racers achieve and the intense G-forces drivers and cars are subjected to, ensuring that Formula One cars perform efficiently and successfully throughout a race is literally a life-and-death matter.

The term formula refers to a strict set of regulations teams must abide by when building their cars in order to keep the races competitive. Unlike in other racing sports, Formula One teams have been required to build their own chassis since 1981, so although teams procure specialized engines from specific manufacturers, they are primarily responsible for building their cars from the ground up.

Each formula has its own set of rules that eligible cars must meet (Formula One being the highest and fastest of these designations), the idea being that these limitations will produce cars that are roughly equivalent in performance. Of course, that won't always be the case, as teams work furiously to seek out every last bit of efficiency and performance while adhering to sport guidelines.⁴ Team members often lean heavily on aerodynamics, racing suspensions, and tires to achieve maximum performance.

The McLaren team is one of the most successful Formula One teams, and engineering director Paddy Lowe understands the behind-the-scenes dynamics that help great racing teams succeed. Speaking on the challenge of incorporating a new component into an existing car, he noted, “There weren't actually that many issues, but we kept experiencing a variety of failures with our new exhaust system. We'd come into the circuit each morning thinking we'd fixed the problems of the previous day, only to be met with a fresh series of trials the next day. Those days were very difficult for the team.

“You have to factor in the skill of the team to work together in a very short period of time to push in a completely different direction; to understand all the different issues. The reliability, the performance, the skills of the team, all the tools they've created over the years—they all came through to our profit. In those instances, there's not a big discussion about who's going to do what; there are very few instructions. Everybody moves seamlessly. They know what they've got to do.”⁵

BMW Motorsport Director Mario Theissen put it simply: “Teamwork is the key to success,” he said. “Of course the basis is formed by a competitive technical package, but without a well-integrated, highly motivated team, even the best car will not achieve prolonged success.”⁶

Rally Car Racing

Whereas NASCAR and Formula One racers speed around a paved track, rally car racing frequently heads off the circuit and into territory that would make Dale Earnhardt step on the brakes: Finnish rallies feature long, treacherous stretches of ice and snow. The famed French Méditerranée-le Cap ran 10,000 miles from the Mediterranean to South Africa. The reputed Baja 1000 Rally ran the length of the Baja California peninsula, largely over deserts without a road in sight.

In rally car racing, drivers race against the clock instead of each other. Races generally consist of several stages that the driver must compete as quickly as possible, and the winning driver completes all stages in the least amount of time.⁷

You could argue that of all racing sports, rally drivers are the most reliant on teamwork to win. Unlike other forms of circuit racing, not only is the driver not racing on a fixed track, but he does not get to see the course before the race begins. Instead, he is wholly reliant on a teammate, the navigator, for information on upcoming terrain. Part coach and part co-pilot, the navigator relies on page notes (detailed information on the sharpness of turns and the steepness of gradients) to keep the driver on course from his place in the car's passenger seat.⁸

Turkish driver Burcu Çetinkaya had already made a name for herself as a successful snowboarder before she decided to take up rally car racing at the age of twenty-four. “I grew up with cars,” she said. “After visiting my first rally when I was twelve, I made up my mind to be a rally driver.”⁹

“The thing that hooked me about rally driving was working together with a team for a common goal with nature working against you,” she said. “I love cars, first of all—I grew up with them and I love every part of them. And I love competition. I have been competing all my life. In a rally, these things come together: nature, competition, teamwork and cars.”¹⁰

You Can't Have One Without the Other

Though they may receive the lion's share of the notoriety and adulation, racing drivers are only one member of a larger team, wherein every team member's performance contributes to the team's success. The best drivers don't let the fame go to their heads. As Jeff Gordon—who knows a thing or two about success—put it, “The only way I can do my job correctly is to be totally clear in my mind and have 100 percent confidence in every person's job that went into this team so that they can have 100 percent confidence in what I'm doing as a driver.”¹¹

Review Questions

1. What types of formal and informal groups would you expect to find in a racing team? What roles could each play in helping the team toward a winning season?
2. Racing teams and their leaders have to make lots of decisions—from the pressures of race day to the routines of everyday team management. When and in what situations would you see teams making decisions by authority rule, minority rule, majority rule, consensus, or unanimity? Are all of these decision approaches acceptable at some times and situations, or are some unacceptable at any time? Defend your answer.
3. Assume you have been retained as a team-building consultant by a famous and successful racing team whose performance fell badly during the prior season. Design a series of team-building activities you will lead the team in performing to strengthen their trust in each other and to improve their individual and collective efforts.
4. Choose a racing team of interest to you. Research the team, its personnel, and its performance in the most recent racing season. Try to answer this question: What accounts for this team's success or lack of success—driver talent, technology, teamwork, or all three? Can you find lessons in the racing team that might apply to teams and organizations in any setting? If so, list at least three that you believe are valuable and transferable insights.

CASE 9
Decisions, Decisions, Decisions

Developed by John R. Schermerhorn, Jr., Ohio University

The Case of the Diamond Ring

Setting—A woman is preparing for a job interview.

Dilemma—She wants the job desperately and is worried that her marital status might adversely affect the interview.

Decision—Should she or should she not wear her diamond engagement ring?

Considerations—When queried for a column in the Wall Street Journal, some women claimed that they would try to hide their marital status during a job interview.¹ One said, “Although I will never remove my wedding band, I don't want anyone to look at my engagement ring and think, she doesn't need this job, what is she doing working?” Even the writer remembers that she considered removing her engagement ring some years back when applying for a job. “I had no idea about the office culture,” she said. “I didn't want anyone making assumptions, however unreasonable, about my commitment to work.”

Wellness or Invasive Coercion?

Setting—Scotts Miracle-Gro Company, Marysville, Ohio.

Dilemma—Corporate executives are concerned about rising health-care costs. CEO Jim Hagedorn backs an aggressive wellness program and anti-smoking campaign to improve health of employees and reduce healthcare costs for the firm. Scott employees are asked to take extensive health-risk assessments; failure to do so increases their health insurance premiums by $40 a month. Employees found to have “moderate to high” health risks are assigned health coaches and given action plans; failure to comply adds another $67 per month. In states where the practice is legal, the firm will not hire a smoker and tests new employees for nicotine use. In response to complaints that the policy is intrusive, Hagedorn says, “If people understand the facts and still choose to smoke, it's suicidal. And we can't encourage suicidal behavior.”

Decision—Is Hagedorn doing the right thing by leading Scotts's human resource policies in this direction?

Considerations—Joe Pellegrini's life was probably saved by his employer. After urging from one of Scotts's health coaches, he saw his doctor about weight and cholesterol concerns. This led to a visit with a heart specialist who inserted two stents, correcting a 95 percent blockage. Scott Rodrigues's life was changed by his employer; he is suing Scotts for wrongful dismissal. A smoker, he claims that he was fired after failing a drug test for nicotine even though he wasn't informed about the test and had been told the company would help him stop smoking. CEO Hagedorn says, “This is an area where CEOs are afraid to go. A lot of people are watching to see how badly we get sued.”²

Super Saleswoman Won't Ask for Raise

Setting—A woman is described as a “productive star” and “super-successful” member of an eighteen-person sales force.³

Dilemma—She finds out that both she and the other female salesperson are being paid 20 percent less than the men. Her sister wants her to talk with her boss and ask for more pay. She says, “No, I'm satisfied with my present pay, and I don't want to ‘rock the boat’.” The sister can't understand how and why she puts up with this situation, allowing herself to be paid less than a man for at least equal and quite possibly better performance.

Considerations—Women still earn only about 75 cents on the average for each dollar earned by a man. Some claim that one explanation for the wage gap and its growing size is that women tolerate the situation and allow it to continue, rather than confronting the gap in their personal circumstances and trying to change it.

Firm Goes Public with Annual Bonuses

Setting—Executives released to the public information on the annual bonuses paid to store employees.

Dilemma—The bonus program has been in place for a number of years. The goal is to link employee motivation and performance with the firm's financial success. In the past each person's bonus was considered a private matter and no bonuses were made public within the firm. However, recently the firm has released to the news media data on bonuses paid to lower-level employees. Coincidentally, the firm has been receiving negative publicity about the low wages paid to employees and the minimal benefits they are eligible to receive. A company spokesperson says that going public with the bonuses was not a response to such criticism.

Considerations—One employee said she received over $1,000 as a bonus, more than the prior year. But a critic stated that the firm “gives executives millions in bonuses and the mere crumbs to the workers.”

Review Questions

1. Critique the decisions being made in these situations. Identify how, where, and why different decisions might be made.
2. What are the issues involved in these situations? How are they best addressed by the decision makers?
3. Find other decision-making examples that raise similar issues and quandaries. Share them with classmates and analyze the possible decisions.

CASE 10
The Case of the Missing Raise

Prepared by John R. Schermerhorn, Jr., Ohio University

It was late February, and Marsha Lloyd had just completed an important long-distance telephone call with Professor Fred Massie, head of the Department of Management at Central University. During the conversation Marsha accepted an offer to move from her present position at Private University, located in the East, to Central in the Midwest as an assistant professor. Marsha and her husband, John, then shared the following thoughts.

Marsha: “Well, it's final.”

John: “It's been a difficult decision, but I know it will work out for the best.”

Marsha: “Yes, however, we are leaving many things we like here.”

John: “I know, but remember, Professor Massie is someone you respect a great deal, and he is offering you a challenge to come and introduce new courses at Central. Besides, he will surely be a pleasure to work for.”

Marsha: “John we're young, eager, and a little adventurous. There's no reason we shouldn't go.”

John: “We're going, dear.”

Marsha Lloyd began the fall semester eagerly. The points discussed in her earlier conversations with Fred were now real challenges, and she was teaching new undergraduate and graduate courses in Central's curriculum. Overall, the transition to Central had been pleasant. The nine faculty members were warm in welcoming her, and Marsha felt it would be good working with them. She also felt comfortable with the performance standards that appeared to exist in the department. Although it was certainly not a “publish or perish” situation, Fred had indicated during the recruiting process that research and publications would be given increasing weight along with teaching and service in future departmental decisions. This was consistent with Marsha's personal belief that a professor should live up to each of these responsibilities. Although there was some conflict evident among the faculty over what weighting and standards should apply to these performance areas, she sensed some consensus that the multiple responsibilities should be respected.

It was April, and spring vacation time. Marsha was sitting at home reflecting upon her experiences to date at Central. She was pleased. Both she and John had adjusted very well to Midwestern life. Although there were things they both missed from their prior location, she was in an interesting new job and they found the rural environment of Central very satisfying. Marsha had also received positive student feedback on her fall semester courses, had presented two papers at a recent professional meeting, and had just been informed that two of her papers would be published by a journal. This was a good record, and she felt satisfied. She had been working hard, and it was paying off.

The spring semester ended, and Marsha was preoccupied. It was time, she thought, for an end-of-the-year performance review by Fred Massie. This anticipation had been stimulated, in part, by a recent meeting of the College faculty in which the dean indicated that a 7 percent pay raise pool was now available for the coming year. He was encouraging department chairpersons to distribute this money differentially based on performance merit. Marsha had listened closely to the dean and liked what she heard. She felt this meant that Central was really trying to establish a performance-oriented reward system. Such a system was consistent with her personal philosophy and, indeed, she taught such reasoning in her courses.

Throughout May, Marsha kept expecting to have a conversation with Fred Massie on these topics. One day, the following memo appeared in her faculty mailbox.

MEMORANDUM
TO: Fellow Faculty
FROM: Fred
RE: Raises for Next Year

The Dean has been most open about the finances of the College as evidenced by his detail and candor regarding the budget at the last faculty meeting. Consistent with that philosophy I want to provide a perspective on raises and clarify a point or two.

The actual dollars available to our department exclusive of the chairman total 7.03 percent. In allocating those funds I have attempted to reward people on the basis of their contribution to the life of the Department and the University, as well as professional growth and development. In addition, it was essential this year to adjust a couple of inequities which had developed over a period of time. The distribution of increments was the following:

5 percent or less	3
5+ percent to 7 percent	2
7+ percent to 9 percent	3
More than 9 percent	2

Marsha read the memo with mixed emotions. Initially, she was upset that Fred had obviously made the pay raise decisions without having spoken first with her about her performance. Still, she felt good because she was sure to be one of those receiving a 9+ percent increase. “Now,” she mused to herself, “it will be good to sit down with Fred and discuss not only this past year's efforts, but my plans for next year's as well.”

Marsha was disappointed when Fred did not contact her for such a discussion. Furthermore, she found herself frequently involved in informal conversations with other faculty members who were speculating over who received the various pay increments.

One day Carla Block, a faculty colleague, came into Marsha's office and said she had asked Fred about Marsha's raise. She said that Marsha received a 7 + percent increase and also learned that the two 9+ percent increases had been given to senior faculty members. Marsha was incredulous. “It can't be,” she thought. “I was a top performer this past year. My teaching and publications records are strong, and I feel I've been a positive force in the department.” She felt Carla could be mistaken and waited to talk the matter out with Fred.

A few days later another colleague reported to Marsha the results of a similar conversation with Fred. This time Marsha exploded internally. She felt she deserved just reward.

The next day Marsha received a computerized notice on her pay increment from the Accounting Office. Her raise was 7.2 percent. That night, after airing her feelings with John, Marsha telephoned Fred at home and arranged to meet with him the next day.

Fred Massie knocked on the door to Marsha's office and entered. The greetings were cordial. Marsha began the conversation. “Fred, we've always been frank with one another, and now I'm concerned about my raise,” she said. “I thought I had a good year, but I understand that I've received just an average raise.” Fred Massie was a person who talked openly, and Marsha could trust him. He responded to Marsha in this way.

“Yes, Marsha, you are a top performer. I feel you have made great contributions to the department. The two nine-plus percent raises went to correct ‘inequities’ that had built up over a period of time for two senior people. I felt that since the money was available this year, I had a responsibility to make the adjustments. If we don't consider them, you received one of the three top raises, and I consider any percentage differences between these three very superficial. I suppose I could have been more discriminating at the lower end of the distribution, but I can't give zero increments. I know you had a good year. It's what I expected when I hired you. You haven't let me down. From your perspective I know you feel you earned an ‘A,’ and I agree. I gave you a ‘B-plus.’ I hope you understand why.”

Marsha sympathized with Fred's logic and felt good having spoken with him. Although she wasn't happy, she understood Fred's position. Her final comment to Fred was this: “You know, it's not the absolute dollar value of the raise that hurts. It's the sense of letdown. Recently, for example, I turned down an extensive consulting job that would have paid far more than the missing raise. I did so because I felt it would require too many days away from the office. I'm not sure my colleagues would make that choice.”

In the course of a casual summer conversation, Carla mentioned to Marsha that she had heard two of the faculty who had received 4+ percent raises had complained to Fred and the dean. After lodging the complaints, they had received additional salary increments. “Oh, great,” Marsha responded to herself, “I thought I had put this thing to rest.”

About three weeks later, Marsha, Fred, Carla, and another colleague were in a meeting with the dean. Although the meeting was on a separate matter, something was said which implied that Carla had also received an additional pay increment. Marsha confronted the dean and learned that this was the case. Carla had protested to Fred and the dean, and they had raised her pay on the justification that an historical salary inequity had been overlooked. Fred was visibly uncomfortable as a discussion ensued on how salary increments should be awarded and what had transpired in the department on this matter.

Fred eventually excused himself to attend another meeting. Marsha and the others continued to discuss the matter with the dean, and the conversation became increasingly heated. Finally, they each rose to terminate the meeting. Marsha felt compelled to say one more thing: “It's not that I'm not making enough money,” she said to the dean, “but I just don't feel I received my fair share, especially in terms of your own stated policy of rewarding faculty on the basis of performance merit.”

With that remark, Marsha left the meeting. As she walked down the hall to her office, she said to herself, “Next year there will be no turning down consulting jobs because of a misguided sense of departmental responsibility.”

Review Questions

1. What is Marsha's conflict management style, and how has it influenced events in this case? What were Marsha's goals, and what conflict management style would have worked best in helping her achieve them?
2. What is Fred's conflict management style, and how has it influenced events in this case?
3. Once Marsha found out what her raise was to be, how could she have used the notion and elements of distributive negotiation to create a situation in which Fred would make a raise adjustment that was favorable and motivating for her?

CASE 11
The Poorly Informed Walrus

Developed by Barbara McCain, Oklahoma City University

“How's it going down there?” barked the big walrus from his perch on the highest rock near the shore. He waited for the good word.

Down below, the smaller walruses conferred hastily among themselves. Things weren't going well at all, but none of them wanted to break the news to the Old Man. He was the biggest and wisest walrus in the herd, and he knew his business, but he had such a terrible temper that every walrus in the herd was terrified of his ferocious bark.

“What will we tell him?” whispered Basil, the second-ranking walrus. He well remembered how the Old Man had raved and ranted at him the last time the herd had caught less than its quota of herring, and he had no desire to go through that experience again. Nevertheless, the walrus noticed for several weeks that the water level in the nearby Arctic bay had been falling constantly, and it had become necessary to travel much farther to catch the dwindling supply of herring. Someone should tell the Old Man; he would probably know what to do. But who? and how?

Finally Basil spoke up: “Things are going pretty well, Chief,” he said. The thought of the receding water line made his heart grow heavy, but he went on: “As a matter of fact, the beach seems to be getting larger.”

The Old Man grunted. “Fine, fine,” he said. “That will give us a bit more elbow room.” He closed his eyes and continued basking in the sun.

The next day brought more trouble. A new herd of walruses moved in down the beach and, with the supply of herring dwindling, this invasion could be dangerous. No one wanted to tell the Old Man, though only he could take the steps necessary to meet this new competition.

Reluctantly, Basil approached the big walrus, who was still sunning himself on the large rock. After some small talk, he said, “Oh, by the way, Chief, a new herd of walruses seems to have moved into our territory.” The Old Man's eyes snapped open, and he filled his great lungs in preparation for a mighty bellow. But Basil added quickly, “Of course, we don't anticipate any trouble. They don't look like herring eaters to me. More likely interested in minnows. And as you know, we don't bother with minnows ourselves.”

The Old Man let out the air with a long sigh. “Good, good,” he said. “No point in our getting excited over nothing then, is there?”

Things didn't get any better in the weeks that followed. One day, peering down from the large rock, the Old Man noticed that part of the herd seemed to be missing. Summoning Basil, he grunted peevishly. “What's going on, Basil? Where is everyone?” Poor Basil didn't have the courage to tell the Old Man that many of the younger walruses were leaving every day to join the new herd. Clearing his throat nervously, he said, “Well Chief, we've been tightening up things a bit. You know, getting rid of some of the dead wood. After all, a herd is only as good as the walruses in it.”

“Run a tight ship, I always say,” the Old Man grunted. “Glad to hear that all is going so well.”

Before long, everyone but Basil had left to join the new herd, and Basil realized that the time had come to tell the Old Man the facts. Terrified but determined, he flopped up to the large rock. “Chief,” he said, “I have bad news. The rest of the herd has left you.” The old walrus was so astonished that he couldn't even work up a good bellow. “Left me?” he cried. “All of them? But why? How could this happen?”

Basil didn't have the heart to tell him, so he merely shrugged helplessly.

“I can't understand it,” the old walrus said. “And just when everything was going so well.”

Review Questions

1. What barriers to communication are evident in this fable?
2. What communication “lessons” does this fable offer to those who are serious about careers in the new workplace?

CASE 12
Political Behavior Analysis

Developed by John R. Schermerhorn, Jr., Ohio University

Read the following incidents and answer the following questions for each:

1. To what extent are power and politics already at play in this situation?
2. How might one of the actors in the incident use power and politics to achieve advantage in the situation described?

Incident 1: New Product Development

Two research scientists are competing for an internal new product development award worth $300,000 and a nice résumé boost. Scientist A is technically the stronger of the two. She is also relatively quiet, reserved, and modest in her dealings with co-workers and higher management. Scientist B is technically good and is considered a good candidate for a management position sometime in the future. He is outgoing, networks widely, and is a real self-promoter. After the proposals were submitted, Scientist A went back to work to await final word on the winner. Scientist B began an aggressive campaign to win the award by making sure that those in charge of the decision and others knew why his proposal should be considered the best one.

Incident 2: Career Advancement

A young woman has been with the financial services firm for two years. She is happy with the work, pleased with her responsibilities, and looking forward to career advancement within the firm. During a casual conversation over coffee she has just learned that a male colleague with less time at the firm has gone to higher management and negotiated a special off-cycle pay raise. The colleague is now earning more, in fact quite a bit more, than she is. The firm's CEO has made many public statements supporting career advancement for women. The culture is one in which no one is supposed to talk about their pay with others inside or outside the firm. The young woman wants more pay and is now unhappy in a situation that she had previously found very satisfying.

Incident 3: Headphones On in the Office

Saul, aged twenty-five, has just started a new job where everyone works in an open-plan office. He's been there about three weeks and is content. A music lover, he has been wearing headphones during the day while working on the computer. Yesterday a colleague who Saul guesses to be about forty to forty-five years old, offered him some “advice.” “You should take off the headphones in the office,” she said, “that's not the way we do things here. People are starting to say that you aren't friendly and tend to be a loner.” This caught Saul by surprise since he has the headphones on most of his free time as well, and he thinks the music helps him stay relaxed and focused while doing detailed computer work. Nobody said anything about such things when he interviewed, and he can't find any company policy or rule that forbids wearing headphones at work. He likes the job, even likes the people, but he doesn't like being told to take the headphones off.

CASE 13
Selecting the New Vice President

Note: Please read only those parts identified by your instructor. Do not read ahead.

Part A

When the new president at Mid-West U took over, it was only a short time before the incumbent vice president announced his resignation. Unfortunately, there was no one waiting in the wings, and a hiring freeze prevented a national search from commencing.

Many faculty leaders and former administrators suggested that the president appoint Jennifer Treeholm, Associate Vice President for Academic Affairs, as interim. She was an extremely popular person on campus and had ten years of experience in the role of associate vice president. She knew everyone and everything about the campus. Treeholm, they assured him, was the natural choice. Besides, she deserved the job. Her devotion to the school was unparalleled, and her energy knew no bounds. The new president, acting on advice from many campus leaders, appointed Treeholm as interim vice president for a term of up to three years. He also agreed that she could be a candidate for the permanent position when the hiring freeze was lifted.

Treeholm and her friends were ecstatic. It was high time more women moved into important positions on campus. They went out for dinner to their every-Friday-night watering hole to celebrate and reflect on Treeholm's career.

Except for a brief stint outside of academe, Treeholm's entire career had been at Mid-West U. She started out teaching introductory history, then, realizing she wanted to get on the tenure track, went back to school and earned her Ph.D. at Metropolitan U while continuing to teach at Mid-West. Upon completion of her degree, she was appointed as an assistant professor and eventually earned the rank of associate based on her popularity and excellent teaching.

Treeholm was well liked, and she devoted her entire life, it seemed, to Mid-West, helping to form the first union, getting grants, writing skits for the faculty club's annual follies, and going out of her way to befriend everyone who needed support.

Eventually, Treeholm was elected president of the faculty senate. After serving for two years, she was offered the position of associate vice president. During her ten years as associate vice president, she handled most of the academic complaints, oversaw several committees, wrote almost all of the letters and reports for the vice president, and was even known to run personal errands for the president. People just knew they could count on her.

Review Questions

1. At this point, what are your predictions about Treeholm as the interim vice president?
2. What do you predict will be her management/leadership style?
3. What are her strengths? Her weaknesses? What is the basis for your assessment?

After you have discussed Part A, please read Part B.

Part B

Treeholm's appointment as interim vice president was met with great enthusiasm. Finally the school was getting someone who was “one of their own,” a person who understood the culture, knew the faculty, and could get things done.

It was not long before the campus realized that things were not moving and that Treeholm, despite her long-standing popularity, had difficulty making tough decisions. Her desire to please people and to try to take care of everyone made it difficult for her to choose opposing alternatives. (To make matters worse, she had trouble planning, organizing, and managing her time.)

The biggest problem was that she did not understand her role as the number-two person at the top of the organization. The president expected her to support him and his decisions without question. Over time the president also expected her to implement some of his decisions—to do his dirty work. This became particularly problematic when it involved firing people or saying “no” to longtime faculty cronies. Treeholm also found herself uncomfortable with the other members of the president's senior staff. Although she was not the only woman (the general counsel, a very bright, analytical woman was part of the group), she found the behavior and decision-making style to be different from what she was used to handling.

Most of the men took their lead from the president and discussed very little in the meetings. Instead, they tried to influence decisions privately. Often, a decision arrived in a meeting as a fait accompli. Treeholm felt excluded and wondered why, as vice president, she felt so powerless.

In time, she and the president spent less and less time together talking and discussing how to move the campus along. Although her relations with the men on the senior staff were cordial, she talked mostly to her female friends.

Treeholm's friends, especially her close-knit group of longtime female colleagues, all assured her that it was because she was “interim.” “Just stay out of trouble,” they told her. Of course this just added to her hesitancy when it came to making tough choices.

As the president's own image on campus shifted after his “honeymoon year,” Treeholm decided to listen to her friends rather than follow the president's lead. After all, her reputation on campus was at stake.

Review Questions

1. What is the major problem facing Treeholm?
2. What would you do if you were in her position?
3. Would a man have the same experience as Treeholm?
4. Are any of your predictions about her management style holding up?

Part C

When the hiring freeze was lifted and Treeholm's position could be filled, the president insisted on a national search. Treeholm and her friends felt this was silly, given that she was going into her third year in the job. Nonetheless, she entered the search process.

After a year-long search, the search committee met with the president. The external candidates were not acceptable to the campus. Treeholm, they recommended, should only be appointed on a permanent basis if she agreed to change her management style.

The president mulled over his dilemma, then decided to give Treeholm the benefit of the doubt and the opportunity. He appointed her permanent provost, while making the following private agreement with her.

1. She would organize her office and staff and begin delegating more work to others.
2. She would “play” her number-two position, backing the president and echoing his position on the university's vision statement.
3. She would provide greater direction for the deans who report to her.

Treeholm agreed to take the position. She was now the university's first female vice president and presided over a council of eleven deans, three of whom were her best female friends. Once again, they sought out their every-Friday-night watering hole for an evening of dinner and celebration.

Review Questions

1. If you were Treeholm, would you have accepted the job?
2. What would you do as the new and permanent vice president?
3. Will Treeholm change her management style? If so, in what ways?
4. What are your predictions for the future?

Part D

Although people had predicted that things would be better once Treeholm was permanently in the job, things in fact became more problematic. People now expected Treeholm to be able to take decisive action. She did not feel she could.

Every time an issue came up, Treeholm would spend weeks, sometimes months, trying to get a sense of the campus. Nothing moved once it hit her office. After a while, people began referring to the vice president's office as “the black hole” where things just went in and disappeared.

Her immediate staff members were concerned and frustrated. Not only did she not delegate effectively, but her desire to make things better led her to try to do more and more herself.

The vice president's job also carried social obligations and requests. Here again, she tried to please everyone and often ran from one evening obligation to another, trying to show her support and concern for every constituency on campus. She was exhausted, overwhelmed, and, knowing the mandate under which she was appointed, anxious about the president's evaluation of her behavior.

The greatest deterioration occurred within her dean's council. Several of the male deans, weary of waiting for direction from Treeholm regarding where she was taking some of the academic proposals of the president, had started making decisions without Treeholm's approval.

“Loose cannons,” was how she described a couple of them. “They don't listen. They just march out there on their own.”

One of the big problems with two of the deans was that they just didn't take “no” for an answer when it came from Treeholm. Privately, each conceded that her “no” sounded like a “maybe”—she always left room to renegotiate.

Whatever the problem—and there were several by now—Treeholm's ability to lead was being questioned. Although her popularity was as high as ever, more and more people on campus were expressing their frustrations with what sometimes appeared as mixed signals from her and the president and sometimes was seen as virtually no direction. People wanted priorities. Instead, crisis management reigned.

Review Questions

1. If you were president, what would you do?
2. If you were Treeholm, what would you do?

Conclusion

Treeholm had a few retreats with her senior staff. Each time, she committed herself to delegate more, prioritize, and work on time management issues, but within ten days or so, everything was back to business as usual.

The president decided to hire a person with extensive corporate experience to fill the vacant position of vice president of finance and administration. The new man was an experienced team player who had survived mergers, been fired and bounced back, and spent years in the number-two position in several companies. Within a few months he had earned the respect of the campus as well as the president and was in fact emerging as the person who really ran the place. Meanwhile, the president concentrated on external affairs and fund-raising.

Treeholm felt relieved. Her role felt clearer. She could devote herself to academic and faculty issues and she was out from under the pressure to play “hatchet man.”

As she neared the magic age for early retirement, Treeholm began to talk more and more about what she wanted to do next.

CASE 14
Zappos Does It with Humor

Zappos.com customers are known for their fierce loyalty, and it's easy to see why. CEO Tony Hsieh has built a billion-dollar business providing happiness to his customers, employees, and even fellow businesspeople seeking to learn more about the company's unique blend of humor, compassion, and high-quality customer service. How does Zappos do it?

Unusual Leader Faces Unusual Circumstances

No stranger to high-pressure conversations, Zappos CEO Tony Hsieh recently found himself discussing a very familiar topic under unusual circumstances.

Hsieh was the featured guest on The Colbert Report, where host Stephen Colbert grilled Hsieh to learn the secrets of Zappos's phenomenal success and rabid customer loyalty. Hsieh simply replied that it's Zappos's goal to deliver WOW in every shoe or clothing box. When Colbert pressed him to explain, Hsieh elaborated that, among other tactics, loyal Zappos customers are sometimes treated to a complementary upgrade to overnight shipping. “A lot of people order as late as midnight Eastern, and the shoes show up on their doorstep eight hours later,” he explained.

Seemingly speechless, Colbert peered over his glasses and only said, “Wow.”¹

From Start-up to One of Fortune's Best Places to Work

The brainchild of Hsieh and founder Nick Swinmurn, Zappos.com launched in 1999, selling only shoes complemented with the unique premise to deliver happiness with every customer interaction. By 2001, gross sales had reached $8.6 million. That number nearly quadrupled to $32 million in 2002. A few years later, Zappos caught the eye of Amazon's Jeff Bezos. He liked what he saw and spent $928 million to buy the firm for Amazon's business stable in 2009.

Today, the company is one of Fortune's 15 Best Companies to Work For and continues to earn more than $1 billion annually. Zappos fulfillment centers currently stock more than three million shoes, handbags, clothing items, and accessories from over 1,130 brands.²

Zappos Grows, Amazon Buys In

Zappos sees a lot of potential in continuing to expand beyond shoes. While footwear still constituted 80 percent to 85 percent of Zappos's business last year, Hsieh wants Zappos's clothing lineup to be another billion-dollar business, and he's working hard to attain that goal within the next three years. “Hopefully, ten years from now, people won't even realize that we started selling shoes,” he said.³

Under Amazon, Zappos has maintained its focus on customer service. For Hsieh, the Zappos brand is less about a particular type of product and more about providing good customer service. He remarked that he could see the Zappos name on things as large as airlines or hotels, as long as the service was up to his exacting standards. “We could be in any industry that we can differentiate ourselves through better customer service and better customer experience,” he said.⁴ This customer-first strategy is working out in a big way for the company: At last count, over 75 percent of its customers are repeat customers.⁵

Customers Get Special Handling

The blog search engine Land calls Zappos “the poster child for how to connect with customers online.” It uses Facebook and Twitter to connect with their customers, distributors, employees, and other businesses.

The company's relentless pursuit of the ultimate customer experience is the stuff of legend. Zappos offers extremely fast shipping at no cost and will cover the return shipping if you are dissatisfied for any reason at any time.

Hsieh, who was unsurprisingly named “The Smartest Dude in Town” by business magazine Vegas Inc., feels employees have to be free to be themselves. That means no-call times or scripts for customer service representatives, regular costume parties, and parades and decorations in each department. Customer service reps are given a lot of leeway to make sure every customer is an enthusiastic customer.

A Culture to Thrive In

Zappos's past success comes down to the company's culture and the unusual amount of openness Hsieh encourages employees, vendors, and other businesses. “If we get the culture right,” he says, “most of the other stuff, like the brand and the customer service will just happen. With most companies, as they grow, the culture goes downhill. We want the culture to grow stronger and stronger as we grow.”

Like other CEOs in it for the long haul, Hsieh is forecasting Zappos's success and the brand experience he intends to deliver years into the future. “Many companies think only one quarter ahead, or one year ahead,” he said. “We like to think about what we want our brand and culture to be like ten or even twenty years down the line. In general, with a ten- to twenty-year timeline versus a three- to five-year timeline, relationships are much more important. What you do after taking someone's money, such as customer service, matters much more than what you do to get their money, such as marketing.”⁶

A Culture to Share

In fact, Hsieh believes so strongly in the organizational culture that encompasses Zappos's desire to satisfy that he's on a mission to share it with anyone who will listen via tours of their headquarters, leadership retreats, and even two new books.

It comes together in a program called Zappos Insights. The core experience is a tour of Zappos's Las Vegas headquarters. “Company Evangelists” lead groups of twenty around the cubicles, which often overflow with kitschy action figures and brightly colored balloons, giving participants a glimpse of a workplace that prizes individuality and fun as much as satisfied customers. Staffers blow horns and ring cowbells to greet participants in the sixteen weekly tours, and each department tries to offer a more outlandish welcome than the last. “The original idea was to add a little fun,” Hsieh says, but it grew into a friendly competition “as the next aisle said, We can do it better.’”⁷

The tours are free, but many visitors actually come for paid one- and two-day seminars that immerse participants in the Zappos culture. Want to learn how to recruit employees who are committed to your company culture? You'll get face time with Zappos HR staff. Yearn to learn what keeps customers coming back? Ask their Customer Loyalty Team. Hungry for a home-cooked meal? The capstone of the two-day boot camp is dinner at Tony Hsieh's house, with ample time to talk customer service with the CEO himself. Seminars range from $497 to $3,997.

“There are management consulting firms that charge really high rates,” says Hsieh. “We wanted to come up with something that's accessible to almost any business.”⁸

Those who want to learn Zappos's secrets without venturing to Las Vegas have a few options. For $39 a month, you can subscribe to a members-only community that grants access to video interviews and chats with Zappos management. Ask nicely, and the company will send you a free copy of its Zappos Family Culture Book, an annual compilation of every employee's ideas about Zappos's mission and core values. Hsieh has his own tome, too—Delivering Happiness.

They may be giving away hard-earned knowledge, but Zappos definitely isn't losing money on the Insights project—profits from the seminars pay for the entire program, and Hsieh hopes it will someday represent 10 percent of Zappos's operating profit.

“There's a huge open market,” says Robert Richman, co-leader of Zappos Insights. “We were afraid that we've been talking about this for free for so long. ‘Are people going to be upset we are charging for it?’ Instead, the reaction is opposite.”⁹ Now that Zappos is part of Amazon, will it still prosper and grow? Will the company continue to put customers first?

Review Questions

1. What traits of effective leadership does Tony Hsieh demonstrate at Zappos? What aspects of his leadership can you criticize, if any? Is his approach transferable to other leaders and other organizations, or is it person and situation specific?
2. Can you find examples of where any of the contingency theories of leadership can be confirmed or disconfirmed in the Zappos setting? Explain your answer.
3. Tony Hsieh is a big thinker, and Zappos is clearly his baby. But he's also into philanthropy and community development activities that are taking up more of his time. Perhaps he'll come up with other new business ideas as well. As a leadership coach, what steps would you recommend that he take now to ensure that his leadership approach and vision lives on at Zappos long after his departure? What can a strong and secure leader like him do to ensure a positive leadership legacy in any situation?

CASE 15
Never on a Sunday

Developed by Anne C. Cowden, California State University, Sacramento

McCoy's Building Supply Centers of San Marcos, Texas, have been in continuous successful operation for over seventy years in an increasingly competitive retail business. McCoy's is one of the nation's largest family-owned and family-managed building-supply companies, serving 10 million customers a year in a regional area currently covering New Mexico, Texas, Oklahoma, Arkansas, Mississippi, and Louisiana. McCoy's strategy has been to occupy a niche in the market of small and medium-size cities.

McCoy's grounding principle is acquiring and selling the finest-quality products that can be found and providing quality service to customers. As an operations-oriented company. McCoy's has always managed without many layers of management. Managers are asked to concentrate on service-related issues in their stores: get the merchandise on the floor, price it, sell it, and help the customer carry it out. The majority of the administrative workload is handled through headquarters so that store employees can concentrate on customer service. The top management team (Emmett McCoy and his two sons, Brian and Mike, who serve as co-presidents) has established eleven teams of managers drawn from the different regions that McCoy's stores cover. The teams meet regularly to discuss new products, better ways for product delivery, and a host of items integral to maintaining customer satisfaction. Team leadership is rotated among the managers.

McCoy's has a workforce of 70 percent full-time and 30 percent part-time employees. The firm has a longstanding reputation of fair dealing that is a source of pride for all employees. McCoy's philosophy values loyal, adaptable, skilled employees as the most essential element of its overall success.

In order to implement this philosophy, the company offers extensive on-the-job training. The path to management involves starting at the store level and learning all facets of operations before advancing into a management program. All management trainees are required to relocate to a number of stores. Most promotions come from within. Managers are rarely recruited from the outside. This may begin to change as the business implements more technology requiring greater reliance on college-educated personnel.

A strong religious belief and a strong commitment to community permeate all that McCoy's does. Many McCoy family members are Evangelical Christians who believe in their faith through letting their “feet do it”—that is, showing their commitment to God through action, not just talk. Although their beliefs and values permeate the company's culture in countless ways, one very concrete way is reflected in the title of this case: “Never on a Sunday.” Even though it's a busy business day for retailers, all 103 McCoy's stores are closed on Sunday.

Review Questions

1. How have the personal beliefs of the McCoy family influenced the organizational culture of their firm?
2. What difference do being “family founded” and “family owned” make when it comes to establishing and maintaining an organizational culture?
3. What lessons for developing organizational cultures can this case provide for other firms that aren't family run?

CASE 16
First Community Financial

Developed by Marcus Osborn, Kutak Rock LLP

First Community Financial is a small business lender that specializes in asset-based lending and factoring for a primarily small-business clientele. First Community's business is generated by high-growth companies in diverse industries, whose capital needs will not be met by traditional banking institutions. First Community Financial will lend in amounts up to $1 million, so its focus is on small business. Since many of the loans that it administers are viewed by many banks as high-risk loans, it is important that the sales staff and loan processors have a solid working relationship. Since the loans and factoring deals that First Community finances are risky, the interest that it charges is at prime plus 6 percent and sometimes higher.

First Community is a credible player in the market because of its history and the human resource policies of the company. The company invests in its employees and works to ensure that turnover is low. The goal of this strategy is to develop a consistent, professional team that has more expertise than its competitors.

Whereas Jim Adamany, president and CEO, has a strong history in the industry and is a recognized expert in asset-based lending and factoring, First Community has one of the youngest staff and management teams in the finance industry. In the banking industry, promotions are slow in coming, because many banks employ conservative personnel programs. First Community, however, has recruited young, ambitious people who are specifically looking to grow with the company. As the company grows, so will the responsibility and rewards for these young executives. In his early thirties, for example, Matt Vincent is a vice president; at only twenty-eight, Brian Zcray is director of marketing.

Since First Community has a diverse product line, it must compete in distinct markets. Its factoring products compete with small specialized factoring companies. Factoring is a way for businesses to improve their cash flow by selling their invoices at a discount. Factoring clients are traditionally the smallest clients finance companies must serve. Education about the nature of the product is crucial if the company is to be successful, since this is often a new approach to financing for many companies. First Community's sales staff is well trained in understanding its product lines and acts as the client's representative as they work through the approval process.

To ensure that the loans or factoring deals fit within the risk profile of the company, First Community must ask many complex financial questions. Many small businesses are intimidated by credit officers, so First Community handles all of these inquiries through the business development officers. The business development officers, in turn, must understand the needs of their credit officers, who are attempting to minimize risk to the company while maintaining a friendly rapport with the client. By centralizing the client contract through educated sales representatives, First Community is able to ask the hard financial questions and still keep the clients interested in the process. A potential customer can be easily discouraged by a credit administrator's strong questioning about financial background. Utilizing the business development officers as an intermediary reduces the fear of many applicants about the credit approval process. Thus, a sales focus is maintained throughout the recruitment and loan application process.

Internally at First Community Financial, one finds continual pressure between the business development staff and the credit committee. The business development staff is focused on bringing in new clients. Their compensation is in large part dependent on how many deals they can execute for the company. Like sales staff in any industry, they are aggressive and always look for new markets for business. The sales staff sells products from both the finance department and the factoring department, so they must interact with credit officers from each division. In each of these groups are credit administrators specifically responsible for ensuring that potential deals meet the lending criteria of the organization. While the business development officer's orientation is to bring in more and more deals, the credit administrator's primary goal is to limit bad loans.

The pressure develops when business development officers bring in potential loans that are rejected by the credit administrators. Since the business development officers have some experience understanding the credit risks of their clients, they often understand the policy reasoning for denying or approving a loan. The business development officers have additional concerns that their loans that have potential to be financed are approved because many of the referral sources of the sales staff will only refer deals to companies that are lending. If First Community fails to help many of a bank's referral clients, that source of business may dry up, as bankers refer deals to other lending institutions.

These structural differences are handled by focused attempts at improving communication. As noted, the First Community staff experiences an extremely low turnover rate. This allows for the development of a cohesive team. With a cohesive staff, the opportunity to maintain frank and open communication helps bridge the different orientations of the sales staff and the administration divisions. A simple philosophy that the opinions of all staff are to be respected is continually implemented.

Since approving a loan is often a policy decision, the sales staff and the loan administrators can have an open forum to discuss whether a loan will be approved. CEO Jim Adamany approves all loans, but since he values the opinions of all of his staff, he provides them all an opportunity to communicate. Issues such as the loan history for an applicant's industry, current bank loan policies, and other factors can be openly discussed from multiple perspectives.

Review Questions

1. What coordinative mechanisms does First Community use to manage the potential conflict between its sales and finance/auditing functions?
2. What qualities should First Community emphasize in hiring new staff to ensure that its functional organizational structure will not yield too many problems?
3. What are the key types of information transfer that First Community needs to emphasize, and how is this transmitted throughout the firm?
4. Why might a small finance company have such a simple structure while a larger firm might find this structure inappropriate?

NOTES

Case 1 References

¹ “Trader Joe's.” Hoover's Company Records. Posted February 14, 2013. 2/14/12.

² “Where in the Dickens Can You Find a Trader Joe's?” Trader Joe's. www.traderjoes.com/pdf/locations/all-llocations.pdf (accessed July 17, 2013).

³ “Product & Guides,” Trader Joe's. www.traderjoes.com/products.asp (accessed July 17, 2013).

⁴ Deborah Orr, “The Cheap Gourmet,” Forbes (April 10, 2006), www.forbes.com/forbes/2006/0410/076.html (accessed July 17, 2013).

⁵ BusinessWeek Online. February 21, 2008.

⁶ “11: Trader Joe's: For vaulting past Whole Foods to become America's favorite organic grocer.” Fast Company. www.fastcompany.com/most-innovative-companies/2011/profile/trader-joes.php (accessed July 17, 2013).

⁷ Marianne Wilson, “When Less Is More,” Chain Store Age (November 2006).

⁸ Mark Hamstra and Elliot Zwiebach, “Food Retailing 2020: SN examines how the food retailing landscape might evolve during the next 10 years” (March 1, 2010), supermarketnews.com/retail_financial/food-retailing-0301/index3.html (accessed July 17, 2013).

⁹ “11: Trader Joe's,” op. cit.

¹⁰ Orr, “The Cheap Gourmet” (2006), op. cit.

¹¹ “Aldi.” Wikipedia. http://en.wikipedia.org/wiki/Aldi#Geographic_distribution (accessed July 17, 2013).

¹² “Trader Joe's Co. 2012.” Supermarket News. http://supermarketnews.com/trader-joe-s-co-2012 (accessed February 2, 2013). Supermarket News's Top 75 Retailers January 12, 2009.

¹³ Shan Li, “Trader Joe's Tries to Keep Quirky Vibe as It Expands Quickly,” Los Angeles Times (October 26, 2011), http://articles.latimes.com/2011/oct/26/business/la-fi-trader-joes-20111027 (accessed July 17, 2013).

¹⁴ www.traderjoes.com/value.html

¹⁵ www.traderjoes.com/how_we_do_biz.html

¹⁶ “Win at the Grocery Game,” Consumer Reports (October 2006), p. 10.

¹⁷ Orr, “The Cheap Gourmet” (2006), op. cit.

¹⁸ www.traderjoes.com/tjs_faqs.asp#DiscontinueProducts

¹⁹ Jerry Hirsch, “Trader Joe's Halting Some Chinese Imports,” Los Angeles Times (February 12, 2008), www.latimes.com/business/la-fi-tj12feb12,1,1079460.story (accessed July 17, 2013).

²⁰ Jena McGregor, “2004 Customer 1st,” Fast Company (October 2004).

²¹ Irwin Speizer, “The Grocery Chain That Shouldn't Be,” Fast Company (February 2004).

²² Heidi Brown, “Buy German,” Forbes (January 12, 2004).

²³ “Trader Joe's Careers: Benefits,” Trader Joe's (n.d.), www.traderjoes.com/careers/benefits.asp

²⁴ Irwin Speizer, “Shopper's Special,” Workforce Management (September 2004).

²⁵ Ibid.

²⁶ Tom Broderick. “Why We Picketed Trader Joe's,” OakPark.com, (November 29, 2011), www.oakpark.com/News/Articles/11-29-2011/Why_we_picketed_Trader_Joe%27s (accessed July 13, 2013).

²⁷ “Welcome Aboard . . . Trader Joe's and CIW Sign Fair Food Agreement!” CIW Online (February 9, 2012), http://ciw-online.org/TJ_agreement.html (accessed July 17, 2013).

²⁸ “Retailer Spotlight,” Gourmet Retailer (June 2006).

Case 2 References

¹ “How Xerox Diversity Breeds Business Success,” http://a1851.g.akamaitech.net/f/1851/2996/24h/cacheB.xerox.com/downloads/usa/en/d/Diversity_Brochure_2006.pdf2 (accessed July 17, 2013).

² “Xerox Reports Fourth-Quarter 2010 Earnings,” Wall Street Journal Online (January 26, 2011), http://online.wsj.com/article/PR-CO-20110126-903779.html (accessed March 1, 2011).

³ www.xerox.com/go/xrx/template/019d.jsp?view=Factbook&id=Overview&Xcntry=USA&Xlang=en_US&Xseg=xnet (accessed July 7, 2009).

⁴ www.xerox.com/downloads/usa/en/n/nr_Xerox_Diversity_Timeline_2008.pdf (accessed July 7, 2009).

⁵ Ibid.

⁶ Ibid.

⁷ www.xeroxcareers.com/working-xerox/diversity.aspx (accessed July 7, 2009).

⁸ “Diversity, Inclusion and Opportunity,” Xerox 2010 Report on Global Citizenship. www.xerox.com/corporate-citizenship-2010/employee-engagement/diversity.html, accessed March 1, 2011).

⁹ “How Xerox Diversity Breeds Business Success,” op. cit.

¹⁰ “Corporate Equality Index: A Report Card on Lesbian, Gay, Bisexual and Transgender Equality in Corporate America,” Human Rights Campaign Foundation (2008), www.hrc.org/files/assets/resources/CorporateEqualityIndex_2009.pdf (accessed July 8, 2009).

Case 3 References

¹ This case is adapted from Jim Donovan (A) and (B) written by Allan R. Cohen and Michael Merenda, University of New Hampshire, for purpose of classroom discussion. Copyright © 1979, Whittemore School of Business and Economics, University of New Hampshire. Reproduced with permission.

Case 6B References

¹ Abridged and adapted from George Strauss and Alex Bavelas, “Group Dynamics and Intergroup Relations” (under the title “The Hovey and Beard Case”), in Money and Motivation, William F. Whyte (ed.), New York: Harper & Row, 1955.

Case 8 References

¹ Robert M. Williamson, “NASCAR Racing: A Model for Equipment Reliability & Teamwork,” Strategic Work Systems (1999), www.swspitcrew.com/articles/NASCAR%200999.pdf (accessed July 17, 2013).

² “Modern Era Race Winners,” NASCAR.com (n.d.) www.nascar.com/kyn/nbtn/cup/data/race_winners.html (accessed February 13, 2013); and Mike Hembree, “CUP: Gordon's Ride Has Been One of Sport's Grandest,” Speed TV (September 6, 2011), http://nascar.speedtv.com/article/cup-jeff-gordons-ride-has-been-one-of-nascars-grandest (accessed July 17, 2013).

³ Dave Rodman, “Teamwork More Important with COT Going Full Time,” NASCAR.com (January 14, 2008), www.nascar.com/2008/news/headlines/cup/01/14/cot.teamwork.kbusch.rnewman.jjohnson/index.html (accessed February 13, 2013).

⁴ “Formula Racing,” Bethelame Indy, www.bethelame-indy.org/formula-racing.php (accessed July 17, 2013).

⁵ Adam Cooper, “F1: Lowe Credits McLaren Teamwork for Success,” Speed TV (April 27, 2011), http://formula-one.speedtv.com/article/f1-lowe-credits-mclaren-teamwork-for-success (accessed July 17, 2013).

⁶ “Teamwork Is the Key to Success—Theissen,” F1 Technical, www.f1technical.net/news/8632 (accessed July 17, 2013).

⁷ “Rallying,” Bethelame Indy, www.bethelame-indy.org/rallying.php (accessed July 17, 2013).

⁸ Ibid.

⁹ Biser3a, “Turkish Ladies Take on the Men in Dubai Rally,” Biser3a, http://biser3a.com/rally/turkish-ladies-take-on-the-men-in-dubai-rally, (accessed July 17, 2013).

¹⁰ Nick Hardy, “The Fastest Woman on Four Wheels?” Gulf News (November 18, 2011), http://gulfnews.com/life-style/motoring/the-fastest-woman-on-four-wheels-1.930540 (accessed July 17, 2013).

¹¹ Williamson (1999), op. cit.

Case 9 References

¹ Information from Sara Schaefer Munoz, “Is Hiding Your Wedding Band Necessary at a Job Interview?” Wall Street Journal (March 15, 2007), p. D3.

² Information and quotes from “Get Healthy—Or Else,” Business Week (February 26, 2007), cover story; and, “Wellness—or Orwellness?” Business Week (March 19, 2007), cover story.

Case 14 References

¹ Kimberly Schaefer, “Zappos.com CEO Tony Hsieh Named the ‘Smartest’ in Town,” Vegas Inc. (September 5, 2011), www.vegasinc.com/news/2011/sep/05/tony-hsieh/#/0 (accessed July 17, 2013).

² “Looking Ahead—Let There Be Anything and Everything,” Zappos (n.d.), http://about.zappos.com/zappos-story/looking-ahead-let-there-be-anything-and-everything (accessed July 17, 2013).

³ Jeremy Twitchell, “From Upstart to $1 Billion Behemoth, Zappos Marks 10 Years” Las Vegas Sun (June 16, 2009), www.lasvegassun.com/news/2009/jun/16/upstart-1-billion-behemoth-zappos-marks-10-year-an (accessed July 17, 2013).

⁴ Andria Cheng, “Zappos, Under Amazon, Keeps its Independent Streak,” MarketWatch (June 11, 2010), www.marketwatch.com/story/zappos-under-amazon-keeps-its-independent-streak-2010-06-11 (accessed July 18, 2013).

⁵ Jeff Cerny, “10 Questions on Customer Service and ‘Delivering Happiness’: An Interview with Zappos CEO Tony Hsieh,” TechRepublic (October 1, 2009), www.techrepublic.com/blog/10things/10-questions-on-customer-service-and-delivering-happiness-an-interview-with-zappos-ceo-tony-hsieh/1067 (accessed July 18, 2013).

⁶ Ibid.

⁷ Christopher Palmeri, “Zappos Retails Its Culture,” BloombergBusinessWeek (December 30, 2009), www.businessweek.com/magazine/content/10_02/b4162057120453.htm (accessed July 18, 2013).

⁸ Brian Morrissey, “Zappos Launches Insights Service,” AdWeek (December 15, 2008), www.adweek.com/aw/content_display/news/digital/e3i1ccc5c91366de3d9c9a65c32df3b5cdc (accessed July 18, 2013).

⁹ Andria Cheng, “Zappos's Grand Mission Doesn't Involve Selling Shoes,” MarketWatch (September 13, 2010), www.marketwatch.com/story/zapposs-grand-mission-goes-beyond-selling-shoes-2010-09-13 (accessed July 17, 2013).