CASE 1
The Virtual Environment Work Team
This case illustrates basic principles of managing teams.
1. Why is this group a team?
2. What characteristics of the team predispose it to making ineffective decisions?
3. What are the characteristics of groupthink that are manifested in the work group?
4. Has Dave been an effective group leader? What should Dave do now?
CASE 2
The Teaching Hospital
I. Summary of the Case
This case shows the impact of two distinctively different styles of management. Dr.
Robert Uric was the head of the Renal Medicine Unit at a large university medical
school and teaching hospital. There was a steady undercurrent of hostility and
competition between the hospital and the medical school. The physical plant,
designed in the shape of an H, paralleled and accentuated the organizational structure.
A large part of the problem was the unusual nature of the financial arrangements. The
inconsistencies between the operations of the hospital and those of the medical school
were highlighted by the integration of medical school faculty into hospital functions.
Personnel from each side complained about the other side. One exception was Dr.
Robert Uric, head of the renal unit. He was liked by the hospital employees with
whom he worked. He was very involved with his patients and students. In one of his
research studies on kidneys, he identified a fluid which would extend the life of a cut–
stem flower. After it was rejected by NIH and the university, Uric sold the rights to a
nursery, which started marketing the product successfully under the name Flower
Life. NIH filed a suit and the university and Uric were involved in the controversy.
The university decided to replace Uric with Dr. Conrad, who had a reputation for
being hard-nosed, and put Uric in a less visible, newly created research chair in
medicine. Under Conrad, serious problems arose in the dialysis unit; absenteeism,
turnover, and grievances went up substantially. Patients were unhappy and the roster
of residents for the service went down dramatically. Shocked by the realization of
how bad the situation had become, the dean and the executive committee
immediately placed Uric back as head of the renal unit; they began to analyze what
had happened and what could be done to put the renal unit—and the hospital’s
reputation—back together again.
II. Possible Responses to the Study Guides
1. Identify the barriers to communication in this case, and describe their impact
on the hospital’s effectiveness.
• Both personal and physical barriers to communication exists in this
case.
• A personal barrier exists in the university’s treatment of the dialysis
unit. A lot of people do not approve of how Dr. Uric behaves and
conducts his business.
• Physical barriers arise from the H-shape structure of the physical
plant.
• the impact of these barriers can be seen in dissatisfaction and
complaining by personnel on each side about the other side.
2. Compare and contrast the two doctors’ styles of management and the
apparent reflections of Theory X and Theory Y assumptions of each of the
doctors.
• Dr. Uric’s involvement with his patients and students exemplifies a
tendency toward Theory Y, whereas Dr. Conrad’s hard-nosed style
leans toward Theory X.
3. Relate various motivational theories, such as McClelland’s drives, Herzberg’s
two-factory theory, and the expectancy model, to this case.
• Dr. Uric seems to have the high achievement and high affiliation
motivation, whereas Dr. Conrad has low affiliation and high power
motivation.
• Dr. Uric used maintenance factors by sharing his grant money and
maintaining good relations with others to motivate his staff and
patients and neutralize the dissatisfaction. However, due to the lack of
the same, Dr. Conrad’s staff was very dissatisfied.
• Instrumentality and expectancy are low under Dr. Conrad’s management,
whereas they seem to be high under Dr. Uric’s leadership. Dr. Uric
himself was highly motivated and had a high expectancy
instrumentality and valence (e.g., receiving the grant, successfully
finding a buyer for the plant fluid).
CASE 3
CREATIVE TOYS COMPANY
I. Summary of the Case
This case illustrates how change in the work layout affects worker productivity. The
transportation department of Creative Toys Company was highly productive, and the
eight-member department surpassed all other departments at one time for twelve
months. The workers had autonomy, recognition, task identity, and an effective
informal organization.
The plant manager decided to bring in consultants to determine if production could be
increased. The consultants recommended changing the physical layout of the
transportation department to facilitate the traffic flow. The transportation department
moved from a circular work area to eight individual areas.
After two months the productivity of the transportation department was declining,
and the plant manager and the owner were unsure of what the real problem was.
II. Possible Responses to the Study Guide
Discuss the role of social systems and their impact of productivity in this case. Be
sure to include comments on change, informal organization, communication, and
motivation.
• Relationships among workers in a system can be just as important as
relationships of the work in that system.
• Since work systems are planned by consultants, often the workers do not
understand why the system operates the way it does.
• Consultants saw the work flow as an engineering factor and ignored the
CASE 4
EASTERN INTERNATIONAL FOOD SERVICE CORPORATION
I. Summary of the Case
This case illustrates the impact of ineffective formal communication combined with
informal communication on employee morale, motivation, productivity, and profits.
Eastern International provided the concession-stand service to the Ocean Point
Amusement Park. Given summer as the only operating season, the company utilized
primarily student labor to staff the stands and other restaurant facilities on the
premises.
Turnover has gone up while sales and profits have gone down, and two more weeks
of peak season remains.
II. Possible Suggestions to the Study Guides
1. Assess Strayhorn’s communication effectiveness. What impact has his
approach had on morale and productivity?
• Open communication is generally better than restricted or no
communication. Mr. Strayhorn has decided to maintain silence
through this tough time, which seems to be a poor choice. If
employees know the problem an organization is facing and hear what
managers are trying to do, they will usually respond favorably. Mr.
Strayhorn’s choice has resulted in a serious negative impact on the
morale and productivity of the employees.
2. Comment on the impact of anxiety, stress, and crises on employee use of
informal communications (the grapevine) in this case.
• The grapevine is more a product of the situation than it is of the
person.
• During periods of excitement and insecurity, such as layoffs or
nonrenewal of contract for Eastern International, especially when
management chooses to maintain silence, people tend to be more
active on the grapevine.
• Grapevines allow people to talk things out and think things through before the
rumor becomes the truth. They act as release valves for people in the system
to reduce stress and anxiety.
CASE 5
GOODMAN COMPANY
I. Summary of the Case
This case deals with change and its impact in a manufacturing company. The
Goodman Company, a small rubber automotive parts manufacturer, recently hired a
production analyst, Ann Bennet, to improve the productivity of the plant. All the
machines are fully staffed and the company has been doing quite well. Ann was hired
to improve productivity of existing equipment without expansion.
Ann Bennet’s recommendation resulted in the production process shifting from an
individual employee handling the entire production process to mass-production
format and compensation changing from hourly rate to piecework systems.
First-shift productivity and quality dropped off considerably after the change.
Employees on this shift had been with the company the longest, were dissatisfied, and
did not welcome the change.
Second-shift productivity also dropped. These workers were in their thirties. There
were personnel changes within the shift, such as Jim being moved to the position of
mechanic where he produced the most.
The third shift was made up of the newest crew, with seven college students and five
other employees who had established an effective informal organization within their
group. They maintained their productivity. They could have improved it but chose to
maintain the production rate.
Overall, implementation of change in the manufacturing process met with disturbing
results.
II. Possible Suggestions for the Study Guides
1. What changes took place at Goodman, and what contributed to the difficulty
in implementing them?
• Primary change in the manufacturing process took place at Goodman
when a mass-production format was introduced in jobs where work
was specialized, and compensation was changed from hourly rate to
piecework system.
• Difficulty in implementing these changes was caused by logical and
psychological resistance of the employees, lack of employee
participation, poor communication, and leadership issue.
2. What problems in communication, motivation, and leadership can you
identify?
• Communication was weakest at the time it was needed most.
Employees needed to know about the change in order to feel secure
and to maintain group cooperation.
• There was little or no motivation for the workers to improve. The
company has not shared the profits or faults of success in the past and
fails to communicate the current reward structure except for a
piecework system, which is degrading for some employees.
3. Discuss the role of informal groups in the Goodman Company.
• Informal groups existed in full force in the third shift. Group members helped
each other out, they were satisfied, and it created a lighter workload for Bob Jackson. Given
its cohesiveness, the group has resisted change, i.e., maintaining productivity levels even
though the group can improve productivity easily.
CASE 6
FALCON COMPUTER
I. Summary of the Case
The incongruence between the stated philosophy of top management and the
operative philosophy (measured by actual behaviors) is the crux of this case. The
Falcon Computer executives prided themselves on several admirable values that they
wrote into the “Falcon Values” document: fair treatment of customers and employees,
participative management of decisions, open communication, and an emphasis on
quality. Unfortunately, as quickly discovered by Peter Richards (a newly hired
software trainer), actual behaviors did not match the stated values. Quality was
actually poor, communication and decision making were truly quite traditional and
hierarchical, and expediency was often rewarded. The firm went bankrupt two years
after Mr. Richards was hired, in part because top management did not “practice what
it preached.” The “Falcon Values” document was, effectively, nothing more than
rhetoric—“lip service,” as some would call it. Top management at Falcon Computer
had failed to properly manage corporate culture in the organization.
II. Possible Responses to the Study Guides
1. What is more important, the statements in a corporate culture document or
actual managerial behavior?
• Managerial behavior. Employees learn by example and quickly
discover what is “real” and what is not.
• The “Falcon Values” document could have been a good first step
toward a healthy corporate culture; as it was, it did more harm than
good.
2. Why did the Falcon executives act as they did?
• Perhaps they were inexperienced top executives and were ignorant of
the potential harm in trying to “impose” culture on an organization.
• They may have feared loss of control or giving up authority.
• They may have adhered to Theory X assumptions about the
3. Why don’t employees like Richards “blow the whistle” on Falcon,
challenging the inconsistency between values and behavior?
• Richards may simply have been afraid he might lose his job if he
“blew the whistle.”
• No laws were apparently violated, so many employees would not
determine that there was anything to “whistle” about.
• No apparent safety issues were involved, or potential harm to
employees or customers, so the problems might not have been
interpreted as “serious enough” by employees.
4. How can executives go about changing the old values that govern an
organization?
• OD might be a good idea; “unfreeze, change and refreeze” could be
necessary because of the radical change that would have to be
undertaken, top to bottom, at Falcon.
• Executives would have to manage rewards systems carefully, making
sure to pay attention to equity considerations and valence of rewards.
• Executives need to create, embody, and imbue the new culture in the
organization. They have to consistently communicate the new values
CASE 7
CONSOLIDATED LIFE
I. Summary of the Case
The case deals with the experiences of Mike Wilson at Consolidated Life. He was
culture of the division and work unit in which Mike was located. Mike was stressed
by the change in culture and style from laissez-faire to authoritarian. Mike’s
freewheeling style was hampered; he was assigned to a supervisor and was expected
to “play ball” according to a stricter working environment. He organized a forum
with his peers to innovate and enliven the workplace. He used the forum to write a
memo to corporate staff. He was reprimanded. A showdown occurred between him
and the VP because of his misinterpreted actions. Mike received the message that
conforming to company rules and expectations is as important as performance (at
which Mike continued to excel). Mike was crushed and decided to leave.
II. Possible Responses to the Study Guides
1. This case can be treated as a three-part predictive exercise.
a. Read only Part 1 and stop. How do you think the supervisors’
“statement of intent” will be received by top management at
Consolidated Life?
• Jack required his employees to do things his way; the
statement could be seen as going against policy.
• Jack had a reputation as tough but fair; if the group could
prove its worth, their statement might be well received.
b. Read Part 2. What do you think Mike will do now? What do you
recommend that he do?
• Alternative courses of action may be to dissolve the forum,
initiate dialogue with Rick and Jack, produce results through
productivity, and/or work with company rules rather than
c. Read Part 3. Should Mike try to continue his career with Consolidated
Life or find a job elsewhere? How does the self-fulfilling prophecy
affect this situation? If he leaves, do you think he can be successful in
another organization?
• Jack saw the forum as a unionization attempt; Mike will have
to drop the forum if he wants to continue with Consolidated
2. Was Mike wise to attempt to change the behavior of his boss? Was such an
attempt ethical? What methods have you read about that he could have used?
What would you have done differently?
• Jack joined the company after Mike had left; when Mike returned,
Jack may have regarded him as a threat to his job security.
• Mike should have waited for a period of time and evaluated Jack’s
attitude and management style before implementing the forum or
suggesting any changes.
• Mike did not go behind Jack’s back with the forum; thus his actions
3. How do you think that Mike would describe the organizational culture at
Consolidated Life? What is an employee’s responsibility for “reading” a
firm’s culture, and for adjusting to it?
4. Evaluate the memo that Mike wrote. Now assess the fairness and
motivational impact of the feedback that Mike received. Will such feedback
be useful in changing his behavior? What advice could you have given Rick
and Jack prior to the meeting with Mike?
CASE 8
VIDEO ELECTRONICS COMPANY
1. Summary of the Case
This case deals with the Video Electronics Company production plant and problems
caused by an expanding industry and increasing competition. Video Electronics
employed unskilled labor, had a reputation for quality, and tripled its workforce in
less than a year in response to the increased demand for its products. With production
down 20 percent and exceedingly high costs, Frank Simpson, founder and president,
decided that a general manager and an industrial engineering staff were the answer to
the production decline and to help the company compete in the market. Simpson felt
that none of the current supervisory employees were qualified for the general
manager position and discussed his decision with the supervisors. The supervisors
were not pleased, but promised their cooperation. Simpson then hired John Rider
from outside the company as general manager, and Rider hired Paul Green to head
the industrial engineering effort. Green spent the first two months getting acquainted
with the supervisors, making only minor changes during that time. The first major
project undertaken to improve production and quality was documentation of
production processes, which was met with resistance by some supervisors. Green
attempted to handle the resistance himself, without telling Rider or Simpson about it.
Five weeks after the study began, a group of supervisors met with Simpson to express
their dissatisfaction with Rider and Green and the changes they were making.
II. Possible Responses to Study Guides
1. If you were Simpson, what would you do now? What would you do later, if
anything? What behavioral models and ideas are involved in your decisions?
• Simpson should assure his supervisors that he understands their view
and will take steps to resolve the issue.
• Simpson could meet with the supervisors at greater length to
determine the full extent and exact origin of their dissatisfaction.
2. Should Simpson have permitted the supervisors to see him, since they now
report directly to Rider?
3. What kinds of changes are taking place in this case? What are the effects of
these changes? What ideas about change will help you in dealing with this
situation?
• Changes: Increase in workforce, hiring outside the company to
resolve problems, implementation of studies to determine where
inefficient production processes are, greater distance between
Simpson and the supervisors because of general manager.
4. Does the learning curve for change apply in this case? Discuss.
CASE 9
ELITE ELECTRIC COMPANY
I. Summary of the Case
This case looks at the Massachusetts plant of the Elite Electric Company, a
manufacturer of electronic components, and the effects of the operational philosophy
of its president, William White, on the plant’s operations. Daily operation meetings
were an integral part of White’s management style when he was plant operations
manager. Peter Johnson, who was chosen by White to take over plant operations
management, continued the daily meetings, adding more line and staff employees as
he deemed necessary. No formal agenda was distributed because the people involved
were long-term employees and Johnson assumed they knew what the day-to-day
issues were. Topics covered at a typical meeting included: safety and quality control
problems, relations with the parent company, employee social events, and production
status reports.
II. Possible Responses to Study Guides
1. Comment on White’s operational philosophy from the standpoint of:
a. the motivational impact of the six goals
b. the overall type of organizational culture that probably exists at Elite
Electric
• Human-oriented working atmosphere is suggestive of a
supportive style, which can increase motivation.
• Maximizing communication, interaction, and involvement
also shows a supportive or participative management style;
both lend themselves to increased motivation.
2. Assess the nature and quality of the communications that took place in the
meeting conducted by Johnson, indicating the strengths and weaknesses that
were illustrated there. Does anyone exhibit assertive communication? What
transactional analysis ego states are apparent?
• Quality: important problems glanced over, trivial issues addressed,
little discussion time.
• Strengths: potential problems identified, interaction with
management.
• Weaknesses: lack of formal agenda could cause some problems to be
overlooked, trivial issues could have been handled away from the
meeting, some issues raised were not pertinent to the entire group
which was a waste of their time (production status reports).
3. Examine some of the group dynamics present in Johnson’s meeting. What
task and social leadership roles were used by participants? How could the
meeting have been improved?
• Task roles: direct the meeting, identify issues to be discussed, keep
the meeting focused on pertinent topics.
4. Why do you think that Johnson concluded that it was a “good meeting”? Do
you agree? Explain.
CASE 10
THE PATTERSON OPERATION
I. Summary of the Case
This case deals with the customer-specified package assembly section of Carrington,
Inc., a manufacturer of pharmaceuticals, proprietary drugs, and cosmetics and
toiletries. Part of this assembly section was moved to a building on Patterson Street
due to space shortages. The building was in a rundown area of town and was old,
dark, poorly ventilated, not air conditioned, and poorly heated, which contrasted
sharply with the facilities at the main plant. Despite these conditions, Fred Hammond,
foreman of the Patterson Operation, made changes in the operation that caused a 33
percent increase in production over the main plant. Along with production changes,
Hammond also allowed employee participation in matters concerning work hours and
rest breaks, relaxed the dress code, and permitted radios in the production area. The
Patterson Operation became a popular choice with the workers in spite of its poorer
working conditions. Although these changes were not in conformance with company
policies, management chose to overlook them because of the resulting increased
productivity.
II. Possible Responses to Study Guides
1. Has the Patterson operation been successful? To the degree that it can be
judged a success, what factors have contributed to it?
2. Identify the leadership styles of Fred Hammond and May Allison. Apply
several of the leadership models to the case, such as Fiedler’s contingency
model and the Hersey-Blanchard situational model.
• Hammond and Allison exhibit signs of participative and supportive
leadership styles.
• Fiedler’s contingency model—leaders are either task or relationship
motivated; Hammond and Allison are relationship motivated.
• Path-goal model—effective leaders clarify expectations of work
goals, link rewards to goals, and explain how goals and rewards can
be achieved; leadership styles are directive, supportive, participative,
and achievement-oriented.
3. Comment on the informal organization at Patterson. In what ways did the
employees create their own “company”?
4. Review Herzberg’s two–factor model. Why didn’t the change in physical
working conditions (a deterioration of a hygiene factor) have a negative effect
on productivity? What did cause the workers to be productive?
• Improvement in the motivational factors (participation, supportive
leadership style) more than offset the poorer working conditions.
• The former practice of frequent job rotation was abandoned, allowing
workers to improve their skills, which resulted in improved
CASE 11
TRW-OILWELL CABLE DIVISION
I. Summary of the Case
This case discusses the problem Bill Russell, newly appointed general manager of the
Oilwell Cable Division of the Industrial and Energy Segment of TRW, faces: lay off
20 people or reduce labor costs by an equivalent amount. Russell’s predecessor, Gino
Strippoli, had established the operation with a team management system. Teams were
organized along functional lines and were responsible for decisions involving
hiring/firing, discipline/grievances, schedule hours, vacations, quality, and
maintenance. After some initial problems, the team management style proved
successful. Strippoli had implied to the employees that no layoffs would ever occur.
This left Russell with a potential problem area. Russell also had to decide whether he
should make the decision alone or continue with the team management system
already in place.
II. Possible Responses to Study Guides
1. Evaluate team management at TRW’s Lawrence plant. What organizational
behavior system is it most similar to? Does it reflect Theory X or Theory Y
assumptions?
• Models of organizational behavior: autocratic, custodial, supportive,
and collegial; the collegial model with its orientation toward
teamwork is most similar to the team management approach used in
this case.
• Strippoli displayed Theory Y assumptions; Russell’s indecision to
include the teams may suggest he holds Theory X assumptions.
2. Examine the results from team management at Lawrence. Do they support a
“satisfaction causes productivity” or a “productivity causes satisfaction”
relationship? Explain.
• Low level of production initially was eliminated by a switch in
concentration from team concepts to technical mastery of equipment.
• Increased productivity resulted in decrease in turnover and
3. Assume the role of Bill Russell at the end of the case. Prepare your
announcement regarding the layoffs to the cable division’s employees. What
do you expect their reactions will be, and how will you respond to them?
• Russell appears to have made the decision to lay off employees rather
than reduce costs (based on idle equipment and employee data).
• If Russell announces the layoffs as the only option and the employees
learn of the cost reduction option, cooperation and acceptance of the
decision will be poor or nonexistent.
• Announcing both options, asking for input, but keeping the final
decision for himself could lead to better acceptance of his decision,
provided he supports his choice and the employees understand and
4. Can participative and team management approaches work equally well during
times of organizational crisis and during normal times? Explain.
