CASE 10:

I. Summary of Relevant Facts

Presidential Decree 1234 created the Coconut Administration of the Philippines (CAP). It
replaces the Philippine Coconut Council (PCC) and two other agencies in April 1974. CAP is
located at Diliman, Quezon City with 8 local regional offices. The CAP currently has over 200
officers, 1000 regular employees and about 200 casual employees. It also has a top heavy
organization with some 800 personnel employees in the central office. Obviously, the
organizational set-up is unbalanced.

In 1975, price of copra became unstably high and vulnerable in the international market,
and coconut products also experienced surprisingly high prices in the world market. This causes
the coconut-based products to have sky-high prices. In order to control the increase, the
government instituted through CAP a fund that would subsidize the domestic price of coconut-
based products. Such fund was collected by a government levy imposed on the first sale of every
100 kilos of copra resecada. Also, a part of the fund is appropriated for the development projects
on the coconut industry to be spearheaded by CAP. Unfortunately, four years after the creation of
the fund, things have not been going smooth in fundraising. National appropriations slashed its
share on CAPs budget by 75% so that by 1980, only P10M is given to CAP. Then, by 1980,
prices of copra and other coconut-oil products reached their peak. As a result, coconut farmers all
over the country lobbied for the abolition of the coconut levy to increase their take-home income.
The President agreed with the farmers and directed the abolition of the levy on 1 April 1980 and
transferred the burden of tax to the exporters. The President also directed a study of the
breakdown of the levy and commissioned a special fact-finding team that would study the current
condition of CAP. After two months of studying and reviewing, it was recommended that CAPs
workforce be reduced by 30%.

CAPs workforce mainly consists of employees and officers that are admitted due to their
political connections back in 1972. They were labelled the untouchables and Dr. Ronaldo M.
Resulta is one of them. He was recommended by the district Congressman in 1970 while he is
responsible for the admission of 100 employees and officers from Cagayan, his home province.
Dr. Resulta is the current CAP Administrator. He began as a Senior Special Assistant to the
Administrator and was promoted to Deputy Administrator and Executive Assistant a year later.
He also served as Senior Deputy Administrator for Agricultural Development and Research for
three years.

For years, Dr. Resulta did not touch the personnel problem because he believe that it will
have a negative effect on the administrations problem. He believes that as long as CAP can
compensate the employees, there is nothing to worry about. He also condoned the improper way
of hiring employees wherein vacancies are filled up and positions are created to accommodate
political resources. Upon learning of CAPs reorganization, he began meeting with Senior staff
and Manager of the Personnel Department, Mr. Danilo Corcha. Mr. Corcha was also hesitant on
the immediate implementation of the plan and cautioned everybody of prematurely telling the
plan to the employees. However, without Dr. Resultas knowledge, the information leaked.
Rumours spread fast to the extent that some spoke of Dr. Resultas hire and fire authority of Dr.
 Resulta. Some old employees felt happy because they expected gratuity payment like the past but
most feared the loss of their employment and source of income.

In 1980, Dr. Resulta announced the impending reorganization. He also announced that all
employees will receive Christmas bonus equivalent to one month pay and allowances. To his
surprise, the crowd was not happy. Dr. Resulta immediately felt the work forces low morale. The
traditional grand Christmas was cancelled, yet some departments held their own parties. In 1981,
Dr. Resulta submitted the new budget. It called for a reduction of employee bonuses to meet
wages and allowances. The budget also include the appropriation for the expenditures on the
proposed reorganization. On 5 January 1981, the budget was passed, approved and confirmed. Dr.
Resulta also have 30 days to implement the reorganization. Confused, Dr. Resultaa requested to
delay the implementation of the order by two more months to allow him to properly select those
who will be retained. The Board approved the request. For him, he thought he could bring back
the same old employee benefits provided the new organizational setup can accommodate the
funds without sacrificing corporate functions of the agency.

II. Issues
The CAP needs to reorganize its organizational structure after losing one of the sources of
their income.
Dr. Resulta, administrator of CAP, do not know which employees to retain and let go of for
the said reorganization.
CAPs hiring process is mainly done in the form of political requests.

III. Guide Questions

1. In order to prevent overhiring of employees, the present government should clearly study,
determine and specify which positions need to be filled up. After determining the positions,
the government should have a fair structured interview. They should also take their time in
looking for the correct employee and avoid being pressured of filling the vacancy in a short
span of time. In addition, the government should also initially determine what skills and
competencies they are looking for an employee. They should also consider both hard and
soft skills. Most of all, they should avoid being lenient with hiring employees because a
friend of a friend needs a job. Thus, the government should not hire when there is no need
to do so.
2. Dr. Resultas management style mainly revolves around trying to provide for the needs and
wants of his employees. He deeply cares for the employees thus, he wants to give
everything to them and avoid firing employees. His style is advantageous to the employees
as they are assured that they have someone that cares for them. However, due to his bias to
employees, the organizations objectives are sacrificed. For him, everything is okay as long
as the employees are okay even if the organization is suffering.
3. The advantages of political accommodations include making it easier for the public to have
a job. It minimizes the complexity of hiring and longevity of waiting. It also minimizes
cost of training since the employee being recommended is usually familiar to the
organization and the people in it. However, political accommodations can disregard the
quality of skills truly needed by the employer since an employee is already ready to take
the job. It also centralizes the chance of getting a job to those that only have connections to
the inner circle. Thus, there is no fair chances given to everyone.
IV. Insights
It is important for managers to have the trust and support of his/her employees since the
organization wont be complete without them. It is also important for managers to take care
of the well-being of the employees because it will improve the performance of the
employees. However, managers should not be so invested in the well-being of the employees
to the extent that the organizations performance is sacrificed. Managers should strike a
balance between providing the needs of the employees and the performance of the
organization as a whole. All in all, managers should think that an organization wont exist
without employees but employees will also not exist without an organization.