Executive Report For Two Case Studies

654 Comprehensive Cases

would use a competitor the next time they had a plumb- ing problem.

Reynaldo is wondering whether DrainFlow’s job design might be contributing to its problems in re- taining customers. DrainFlow has about 2,000 employ- ees in four basic job categories: plumbers, plumber’s assistants, order processors, and billing representa- tives. This structure is designed to keep costs as low as possible. Plumbers make very high wages, whereas plumber’s assistants make about one-quarter of what a licensed plumber makes. Using plumber’s assistants is therefore a very cost-effective strategy that has enabled DrainFlow to easily undercut the competition when it comes to price. Order processors make even less than assistants but about the same as billing processors. All work is very specialized, but employees are often de- pendent on another job category to perform at their most efficient level.

Like most plumbing companies, DrainFlow gets business mostly from the Yellow Pages and the Inter- net. Customers either call in to describe a plumbing problem or submit an online request for plumbing services, receiving a return call with information within 24 hours. In either case, DrainFlow’s order processors listen to the customer’s description of the problem to determine whether a plumber or a plumb- er’s assistant should make the service call. The job is then assigned accordingly, and a service provider goes to the location. When the job has been completed, via cell phone a billing representative relays the fee to the service rep, who presents a bill to the customer for payment. Billing representatives can take customers’ credit card payments by phone or e-mail an invoice for online payment.

The Problem Although specialization does cut costs significantly, Reynaldo is worried about customer dissatisfaction. According to her survey, about 25 percent of customer contacts ended in no service call because customers were confused by the diagnostic questions the order processors asked and because the order processors did not have sufficient knowledge or skill to explain the situation. That means fully one in four people who call  DrainFlow to hire a plumber are worse than

Learning Goals Companies often divide up work as a way to improve efficiency, but specialization can lead to negative con- sequences. DrainFlow is a company that has effectively used specialization to reduce costs relative to its com- petitors’ costs for years, but rising customer complaints suggest the firm’s strong position may be slipping. Af- ter reading the case, you will suggest some ways it can create more interesting work for employees. You’ll also tackle the problem of finding people qualified and ready to perform the multiple responsibilities required in these jobs.

Major Topic Areas Job design Job satisfaction Personality Emotional labor

The Scenario DrainFlow is a large residential and commercial plumb- ing maintenance firm that operates around the United States. It has been a major player in residential plumb- ing for decades, and its familiar rhyming motto, “When Your Drain Won’t Go, Call DrainFlow,” has been plas- tered on billboards since the 1960s.

Lee Reynaldo has been a regional manager at Drain- Flow for about 2 years. She used to work for a newer competing chain, Lightning Plumber, that has been drawing more and more customers from DrainFlow. Al- though her job at DrainFlow pays more, Reynaldo isn’t happy with the way things are going. She’s noticed the work environment just isn’t as vital or energetic as the environment she saw at Lightning.

Reynaldo thinks the problem is that employees aren’t motivated to provide the type of customer service Light- ning Plumber employees offer. She recently sent surveys to customers to collect information about performance, and the data confirmed her fears. Although 60 percent of respondents said they were satisfied with their expe- rience and would use DrainFlow again, 40 percent felt their experience was not good, and 30 percent said they

2 Repairing Jobs That Fail to Satisfy C A S E

 

 

CASE 2 Repairing Jobs That Fail to Satisfy 655

questions. Most of us don’t know any more about plumbing than the caller. If they don’t use the terms on the survey, we don’t understand what they’re talk- ing about. A plumber would, but we’re not plumbers; we just take the calls.”

Customer service issues also involve the billing rep- resentatives. They are the ones who have to keep con- tacting customers about payment. “It’s not my fault the wrong guy was sent,” says Elizabeth Monty. “If two guys went out, that’s two trips. If a plumber did the work, you pay plumber rates. Some of these customers don’t get that I didn’t take their first call, and so I get yelled at.” The billing representatives also complain that they see only the tail end of the process, so they don’t know what the original call entailed. The job is fairly impersonal, and much of the work is recording customer complaints. Remember—40 percent of cus- tomers aren’t satisfied, and it’s the billing representa- tives who take the brunt of their negative reactions on the phone.

As you can probably tell, all employees have to engage in emotional labor, as described in this text- book, and many lack the skills or personality traits to complete the customer interaction component of their jobs. They aren’t trained to provide customer service, and they see their work mostly in technical, or mechanical, terms. Quite a few are actually anxious about speaking directly with customers. The office staff (order processors and billing representatives) realize customer service is part of their job, but they also find dealing with negative feedback from custom- ers and coworkers taxing.

A couple of years ago a management consulting company was hired to survey DrainFlow worker atti- tudes. The results showed they were less satisfied than workers in other comparable jobs. The following table provides a breakdown of respondent satisfaction levels across a number of categories:

dissatisfied: they aren’t customers at all! The remaining 75 percent of calls that did end in a customer service encounter resulted in other problems.

The most frequent complaints Reynaldo found in the customer surveys were about response time and cost, especially when the wrong person was sent to a job. A plumber’s assistant cannot complete a more techni- cally complicated job. The appointment has to be re- scheduled, and the customer’s time and the staff’s time have been wasted. The resulting delay often caused customers in these situations to decline further con- tact with DrainFlow—many of them decided to go with Lightning Plumber.

“When I arrive at a job I can’t take care of,” says plumber’s assistant Jim Larson, “the customer gets ticked off. They thought they were getting a licensed plumber, since they were calling for a plumber. Telling them they have to have someone else come out doesn’t go over well.”

On the other hand, when a plumber responds to a job easily handled by a plumber’s assistant, the cus- tomer is still charged at the plumber’s higher pay rate. Licensed plumber Luis Berger also does not like being in the position of giving customers bad news. “If I get called out to do something like snake a drain, the cus- tomer isn’t expecting a hefty bill. I’m caught between a rock and a hard place—I don’t set the rates or make the appointments, but I’m the one who gets it from the customer.” Plumbers also resent being sent to do such simple work.

Susie McCarty is one of DrainFlow’s order proces- sors. She’s frustrated too when the wrong person is sent to a job but feels she and the other order proces- sors are doing the best they can. “We have a survey we’re supposed to follow with the calls to find out what the problem is and who needs to take the job,” she explains. “The customers don’t know that we have a standard form, so they think we can answer all their

DrainFlow Plumbers

DrainFlow Plumber Assistants

DrainFlow Office

Workers Average Plumber

Average Office

Workers I am satisfied with the work I am asked to do.

3.7 2.5 2.5 4.3 3.5

I am satisfied with my working conditions.

3.8 2.4 3.7 4.1 4.2

I am satisfied with my interactions with coworkers.

3.5 3.2 2.7 3.8 3.9

I am satisfied with my interactions with my supervisor.

2.5 2.3 2.2 3.5 3.4

 

 

656 Comprehensive Cases

structured-interview programs. Make certain it is in the form of a professional business document that you’d actually give to an experienced manager at this level of a fairly large corporation. Reynaldo is very smart when it comes to managing finances and running a plumb- ing business, but she won’t necessarily know about the organizational behavior principles you’re describing. Because any new proposals must be passed through top management, you should also address their concerns about cost containment. You’ll need to make a strong evidence-based financial case that changing the man- agement style will benefit the company.

When you write, make sure you touch on the follow- ing points:

CC-11. Although it’s clear employees are not especially satisfied with their work, do you think this is a reason for concern? Does research suggest sat- isfied workers are actually better at their jobs? Are any other behavioral outcomes associated with job satisfaction?

CC-12. Using job characteristics theory, explain why the present system of job design may be con- tributing to employee dissatisfaction. Describe some ways you could help employees feel more satisfied with their work by redesigning their jobs.

CC-13. Reynaldo has a somewhat vague idea about how to implement the cash rewards system. Describe some of the specific ways you would make the reward system work better, based on the case.

CC-14. Explain the advantages and disadvantages of using financial incentives in a program of this nature. What, if any, potential problems might arise if people are given money for achieving customer satisfaction goals? What other types of incentives might be considered?

CC-15. Create a specific plan to assess whether the reward system is working. What are the dependent variables that should change if the system works? How will you go about measur- ing success?

CC-16. What types of hiring recommendations would you make to find people better suited for these jobs? Which Big Five personality traits would be useful for the customer service responsibilities and emotional labor?

The information about average plumbers and aver- age office workers is taken from the management con- sulting company’s records of other companies. They aren’t exactly surprising, given some of the complaints DrainFlow employees have made. Top management is worried about these results, but they haven’t been able to formulate a solution. The traditional DrainFlow cul- ture has been focused on cost containment, and the “soft stuff” like employee satisfaction hasn’t been a major issue.

The Proposed Solution The company is in trouble, and as revenues shrink and the cost savings that were supposed to be achieved by dividing up work fail to materialize, a change seems to be in order.

Reynaldo is proposing using cash rewards to improve performance among employees. She thinks if employees were paid based on work outcomes, they’d work harder to satisfy customers. Because it’s not easy to measure how satisfied people are with the initial call-in, Reynaldo would like to give the order pro- cessors a small reward for every 20 calls successfully completed. For the hands-on work, she’d like to have each billing representative collect information about customer satisfaction for each completed call. If no complaints are made and the job is handled promptly, a moderate cash reward would be given to the plumb- er or plumber’s assistant. If the customer indicates real satisfaction with the service, a larger cash reward would be provided.

Reynaldo also wants to find people who are a bet- ter fit with the company’s new goals. Current hiring procedure relies on unstructured interviews with each location’s general manager, and little consistency is found in the way these managers choose employees. Most lack training in customer service and organiza- tional behavior. Reynaldo thinks it would be better if hiring methods were standardized across all branches in her region to help managers identify recruits who can actually succeed in the job.

Your Assignment Your task is to prepare a report for Reynaldo on the potential effectiveness of her cash reward and

 

 

CASE 3 Building a Coalition 657

and measurement staff; the school system will provide classrooms and teaching staff.

The first stage in bringing this new plan to fruition is the formation of an executive development team. This team will span multiple functional areas and establish the operating plan for improving school performance. Its cross-organizational nature means representatives from both the Woodson Foundation and the school district must participate. The National Coalition for Parental Involvement in Education (NCPIE) is also going to be a major partner in the program, acting as a representative for parents on behalf of the PTA.

Conflict and Agreement in the Development Team While it would be perfect if all the groups could work together easily to improve student outcomes, there is little doubt some substantive conflicts will arise. Each group has its own interests, and in some cases these are directly opposed to one another.

School district representatives want to ensure the new jobs will be unionized and will operate in a way con- sistent with current school board policies. They are very concerned that if Woodson assumes too dominant a role, the school board won’t be able to control the operations of the new system. The complexity of the school system has led to the development of a highly complex bureau- cratic structure over time, and administrators want to make sure their policies and procedures will still hold for teachers in these programs even outside the regular school day. They also worry that jobs going into the new system will take funding from other school district jobs.

Woodson, founded by entrepreneur Theodore Wood- son around 1910, still bears the hallmarks of its founder’s way of doing business. Woodson emphasized efficiency and experimentation in everything he did. Many of the foundation’s charities have won awards for minimizing costs while still providing excellent services. Their focus on using hard data to measure performance for all their initiatives is not consistent with the school district culture.

Finally, the NCPIE is driven by a mission to increase parental control. The organization believes that when communities are able to drive their own educational methods, students and parents are better able to achieve success together. The organization is strongly commit- ted to celebrating diversity along racial, gender, ethnic,

Learning Goals Many of the most important organizational behavior challenges require coordinating plans and goals among groups. This case describes a multiorganizational effort, but the same principles of accommodation and com- promise also apply when trying to work with multiple divisions within a single organization. You’ll create a blueprint for managing a complex development team’s progress, steering team members away from negative conflicts and toward productive discussion. You’ll also be asked to help create a new message for executives so they can lead effectively.

Major Topic Areas Group dynamics Maximizing team performance Organizational culture Integrative bargaining

The Scenario The Woodson Foundation, a large nonprofit social service agency, is teaming up with the public school sys- tem in Washington, D.C., to improve student outcomes. There’s ample room for improvement. The schools have problems with truancy, low student performance, and crime. New staff quickly burn out as their initial enthusiasm for helping students is blunted by the harsh realities they encounter in the classroom. Turnover among new teachers is very high, and many of the best and brightest are the most likely to leave for schools that aren’t as troubled.

The plan is to create an experimental after-school program that will combine the Woodson Foundation’s skill in raising private money and coordinating com- munity leaders with the educational expertise of school staff. Ideally, the system will be financially self-sufficient, which is important because less money is available for schools than in the past. After several months of nego- tiation, the leaders of the Woodson Foundation and the school system have agreed that the best course is to develop a new agency that will draw on resources from both organizations. The Woodson foundation will provide logistical support and program development

3 Building a Coalition C A S E

 

 

658 Comprehensive Cases

best. The parents, at least, have more of a stake in this.” “The most important thing is the kids,” says sec-

ond-year teacher Ari Kaufman. He is well liked by his students but doesn’t get along well with other faculty members. He’s seen as a “squeaky wheel.” “The schools need change so badly. And how did they get this way? From too little outside involvement.”

Community organizer Mason Dupree doesn’t like the level of bureaucracy either. He worries that the school’s answer to its problems is to throw more money at them. “I know these kids. I grew up in these neighborhoods. My parents knew every single teacher I had. The schools wanted our involvement then. Now all they want is our money. And I wouldn’t mind giving it to them if I thought it would be used responsibly, not spent on raises for peo- ple who haven’t shown they can get the job done.”

Meredith Watson, with the Woodson Foundation, agrees the schools have become less focused on the families. A former teacher, she left the field of educa- tion after being in the classroom for 6 years. “There is so much waste in the system,” she complains. “Jobs are unnecessarily duplicated, change processes are need- lessly convoluted. Unless you’re an insider already, you can’t get anything done. These parents want to be in- volved. They know their kids best.”

Unlike her NCPIE colleagues, Candace Sharpe thinks the schools are doing the best they can. She is a county social worker, relatively new to the D.C. area. “Parents say they want to be involved but then don’t fol- low through. We need to step it up, we need to lead the way. Lasting change doesn’t come from the outside, it comes from the home.”

Victor Martinez has been at the Woodson Founda- tion for 10 years, starting as an intern straight out of col- lege. “It’s sometimes hard to see a situation when you’re in the thick of it,” he explains. “Nobody likes to be told they’re doing something wrong, but sometimes it has to be said. We all know there are flaws in the system. We can’t keep the status quo. It just isn’t cutting it.”

Strategies for the Program Team Once the basic membership and principles for the development team have been established, the program team would also like to develop a handbook for those who will be running the new program. Ideally, this set of principles can help train new leaders to create an inspirational message that will facilitate success. The ac- tual content of the program and the nature of the mes- sage will be hammered out by the development team, but it is still possible to generate some overriding princi- ples for the program team in advance of these decisions.

and disability status categories. Its members are most interested in the process by which changes are made, ensuring everyone has the ability to weigh in.

Some demographic diversity issues complicate the team’s situation. Most of the students served by the Washington, D.C., school district are African Ameri- can, along with large populations of Caucasians and Hispanics. The NCPIE makeup generally matches the demographic diversity of the areas served by the public schools. The Woodson foundation, based in northern Virginia, is predominantly staffed by Caucasian profes- sionals. There is some concern with the idea that a new group that does not understand the demographic con- cerns of the community will be so involved in a major change in educational administration. The leadership of the new program will have to be able to present an ef- fective message for generating enthusiasm for the pro- gram across diverse stakeholder groups.

Although the groups differ in important ways, it’s also worth considering what they have in common. All are in- terested in meeting the needs of students. All would like to increase student learning. The school system does benefit from anything that increases student test scores. And the Woodson Foundation and NCPIE are united in their desire to see more parents engaged in the system.

Candidates for the Development Team The development team will consist of three individu- als—HR representatives from the Woodson Foundation, the schools, and the NCPIE—who have prepared the following list of potential candidates for consideration.

Victoria Adams is the superintendent of schools for Washington, D.C. She spearheaded the initial commu- nication with the Woodson Foundation and has been building support among teachers and principals. She thinks the schools and the foundation need to have larg- er roles than the parents and communities. “Of course we want their involvement and support, but as the pro- fessionals, we should have more say when it comes to making decisions and implementing programs. We don’t want to shut anyone out, but we have to be realis- tic about what the parents can do.”

Duane Hardy has been a principal in the Washington area for more than 15 years. He also thinks the schools should have the most power. “We’re the ones who work with these kids every day. I’ve watched class sizes get big- ger, and scores and graduation rates go down. Yes, we need to fix this, but these outside groups can’t under- stand the limitations we’re dealing with. We have the com- munity, the politicians, the taxpayers— everyone watching what we’re doing, everyone thinking they know what’s

 

 

CASE 4 Boundar yless Organizations 659

groups and teams in the textbook to defend your choices.

CC-19. Using principles from the chapters on groups and teams, describe how you will advise the team to manage conflict effectively.

CC-20. Describe how integrative negotiation strategies might achieve joint goals for the development team.

The following points should help you form a message for the program team:

CC-21. Leaders of the new combined organization should have a good idea of the culture of the school dis- trict, the NCPIE, and the Woodson Foundation because they will need to manage relationships with all three groups on an ongoing basis. How would you describe the culture of these various stakeholder organizations? Use concepts from the chapter on organizational culture to de- scribe how they differ and how they are similar.

CC-22. Consider how leaders of the new program can gen- erate a transformational message and encourage employee and parent trust. Using material from the chapter on leadership, describe how you would advise leaders to accomplish these ends.

CC-23. Given the potential for demographic fault lines in negotiating these changes, what would you advise as a strategy for managing diversity issues for program leaders?

Your Assignment The Woodson Foundation, the NCPIE, and the schools have asked you to provide some information about how to form teams effectively. They would like your response to explain what should be done at each step of the way, from the selection of appropriate team members to set- ting group priorities and goals, setting deadlines, and describing effective methods for resolving conflicts that arise. After this, they’d like you to prepare a brief set of principles for leaders of the newly established program. That means you will have two audiences: the develop- ment team, which will receive one report on how it can effectively design the program, and the program team, which will receive one report on how it can effectively lead the new program.

The following points should help you form a com- prehensive message for the development team:

CC-17. The development team will be more effective if members have some idea about how groups and teams typically operate. Review the domi- nant perspectives on team formation and per- formance from the chapters in the book for the committee so it can know what to expect.

CC-18. Given the profiles of candidates for the development team, provide suggestions for who would likely be a good group member and who might be less effective in this situa- tion. Be sure you are using the research on

Human resources Organizational socialization

The Scenario Newskool Grooves is a transnational company develop- ing music software. The software is used to compose music, play recordings in clubs, and produce albums. Founder and CEO Gerd Finger is, understandably, the company’s biggest fan. “I started this company from nothing, from just me, my ideas, and my computer. I  love music—love playing music, love writing pro- grams for making music, love listening to music—and the money is nice, too.” Finger says he never wanted to work for someone else, to give away his ideas and let someone else profit from them. He wanted to keep

Learning Goals The multinational organization is an increasingly com- mon and important part of the economy. This case takes you into the world of a cutting-edge music software busi- ness seeking success across three very different national and organizational cultures. Its managers need to make important decisions about how to structure work pro- cesses so employees can be satisfied and productive do- ing very different tasks.

Major Topic Areas Organizational structure and boundaryless organizations Organizational culture

4 Boundaryless Organizations C A S E