CASE STUDY 4.
1 ROUGH SEAS ON THE LINK650
Professor Suzanne Baxter was preparing for her first class
ofthe semester when Shaun O'Neill knocked lightly on the
open door and announced himself: "Hi, Professor, I don't
suppose you remember me?" Professor Baxter had large
classes, but she did remember that Shaun was a student in
her organizational behavior class a few years ago. Shaun
had decided to work in the oil industry for. a couple of years
before returning to school to complete his diploma.
"Welcome back!" Baxter said as she beckoned him into
the office. "I heard you were working on an oil rig in the
United Kingdom. How was it?"
"Well, Professor;' Shaun began, "I had worked two sum-
mers in the Texan oil fields and my family's from Ireland,
so I hoped to get a job on the LINK650. It's that new
WestOil drilling rig that arrived with so much fanfare in
the North Sea fields a few years ago. The LINK650 was
built by LINK, Inc., in Texas. A standard practice in this
industry is for the rig manufacturer to manage its day-to-
day operations, so employees on the LINK6SO are managed
completely by LINK managers with no involvement from
WestOil. We all knoW that drilling rig jobs are dangerous,
but they pay well and offer generous time off. A local news-
paper there said that nearly 1,000 people lined up to com-
plete job applications for the SO nontechnical positions. I
was lucky enough to get one of those jobs.
"Everyone hired on the LINK6SO was enthusiastic and
proud. We were one of the chosen few and were really
worse when the LINK6SO was shut down twice to correct
mechanical problems. These setbacks embarrassed LINK's
management and they put more pressure on the supervi-
sors to get us back on schedule.
"The supervisors started to ignore equipment problems
and pushed us to get jobs done more quickly \Vithout re-
gard to safety procedures. They routinely shouted obsceni-
ties at employees in front of others. A couple of my work
mates were fired, and a couple of others quit their jobs. I
almost lost my job one day just because my boss thought I
was deliberately working slo'ivly. He didn't realize-or
care-that the fittings I \Vas connecting were damaged.
Several people started finding ways to avoid the supervi-
sors and get as little work done as possible. Many of my
coworkers developed back problems. We jokingly called it
the 'rigger's backache; because some en1ployees faked their
ailment to leave the rig with paid sick leave.
''Along with having lousy supervisors, we were always
kept in the dark about the problems on the rig. Supervisors
said that they didn't know anything, which was partly true,
but they said we shouldn't be so interested in things that
didn't concern us. But the rig's problems, as well as its future
contract work, were a major concern to crew members who
weren't ready to quit. Their job security depended on the
rig's production levels and whether WestOil would sign
contracts to drill new holes. Given the rig's problems, most
of us were concerned that we would be laid off at any time.
"Everything came to a head when Bob MacKenzie was
killed because someone secured a hoist improperly. Not
sure if it was mentioned in the papers here, but it was big
news around this time last year. A government inquiry
pumped up about working on a new rig that had received
so much media attention. I was quite impressed with the
recruiters-so were several other hires-because they re-
ally seemed to be concerned about our welfare out on ·the
platform. I later discovered that the recruiters came from a
consulting firm that specializes in hiring people. Come to
think of it, we didn't meet a single LINK manager during
that process. Maybe things would have been different if
some of those LINK supervisors had interviewed us.
"Working on LINK650 was a real shock, even though
most of us had some experience working in the oil fields.
I'd say that none of the SO nontechnical people hired was
quite prepared for the brutal jobs on the oil rig. We did the
dirtiest jobs in the biting cold winds of the North Sea. Still,
during the first few months most of us wanted to show the
company that we were dedicated to getting the job done. A
couple of the new hires quit within a few weeks, but most of
the people hired with me really got cilong well-you know,
just like the ideas you mentioned in class. We formed a spe-
cial bond that helped us through the bad weather and gru-
eling work.
"The LINK6SO supervisors were another matter. They
were mean taskmasters who had worked for many years on
oil rigs in the Gulf of Mexico or North Sea. They seemed to
relish the idea of treating their employees the same way
they had been treated before becoming managers. We put
up with their abuse for the first few months, but things got
concluded that the pers.on responsible wasn't properly
trained and that employees were being pushed to finish
jobs without safety precautions. An}'W"ay, while the in-
quiry was going on, several employees decided to union-
ize the rig. It wasn't long before most employees on
LINK6SO had signed union cards. That really shocked
. LINK's management and the entire oil industry because it
was, I think, just the second time that a rig had ever been
unionized there.
"Since then, management has been doing everything in
its power to get rid of the union. It sent a 'safety officer' to
the rig, although we eventually realized that he was a con-
sultant the company hired to undermine union support.
Several managers were sent to special seminars on how to
manage a unionized work force, although one of the topics
was how to break the union.
"So you see, Professor, I joined LINK as an enthusiastic
employee and quit last month with no desire to lift a finger
for them. It really bothers me, because I was ahvays told to
do your best, no matter how tough the situation. It's been
quite an experience:'
Discussion Questions
1. Identify the various ways that employees expressed
their job dissatisfaction on the LINK650.
2. Shaun O'Neill's commitment to the LINK organization
dwindled over his two years of employment. Discuss the
factors that affected his organizational commi~ent.
Source:© Copyright Steven L McShane. This case is based on actual
events, though names and some information have been changed.
I 410

3.
PART 3 Team Processes

Companies have been slow and reluctant to adopt social media channels, online videos and similar forms of communication. If you
were a senior manager, how would you introduce these communication technologies into the workplace to share information and
knowledge more effectively?
Sources: Mary Beth Matzek. 'RU on 2 Gen Y?' Marketplace, 4 September 2007.10; Richard Denniron, 'Encouraging BT's Authentic Vo ice of Leadership,' Strategic Communication Management 12,
no. 2{2008):12.

WHEN BEING THE BOSS
ISN'T ENOUGH
BY CARLENE BOUCHER, RMIT UNIVERSITY
Central Health Aged Care Service (CHAC) is a large, government-
owned organisation that employs more than 500 staff including
nurses, doctors, allied health staff and many types of health
assistants and administrative staff. The organisation provides a range
of in-patient and out-patient rehabilitation services to older people
in the community. It is funded by the government, based on the
number of patients that the organisation treats, and there is a strict
formula that controls how much funding it receives. The day-to-
day operations of CHAC are overseen by the chief executive officer
{CEO), who reports to a board made up of a range of professionals
including medical doctors, accountants and lawyers. The chair of the
board is Dr Lewis Clark, who recently retired and was a local general
practitioner for many years. He has been chair for only three months.
The CEO of CHAC is Marcia Chan, who has worked in aged care
for over 20 years. She became CEO early in 2011. Her background
is in finance and human resources management, and she managed
a number of smaller facilities very effectively before coming to
CHAC. The clinical services at CHAC are overseen by Dr Ryan
Gosling, a medical doctor who has worked at CHAC for 20 years
and became medical director in 2009. He is a very well-known and
respected doctor, specialising in the care and treatment of older
people. He had applied unsuccessfully for the job of CEO when
Ms Chan was appointed.
Recently, there have been a number of instances where Ms Chan
and Dr Gosling have disagreed and the staff have disobeyed Ms
Chan's directions and complied with Dr Gosling's requests. The most
recent of these incidents was about the transfer of a very ill patient
to another facility. Ms Chan wanted to transfer the patient because
she believed it would be too expensive for CHAC to provide the
care that the patient needed. She also had some doubts about
whether Dr Gosling had the medical expertise needed to treat
the patient. She thought that the patient would be better off in
a facility where there was a range of specialists, rather than just
geriatricians. However, Dr Gosling believed that the patient should
not be transferred because the long ambulance trip might harm her.
He also believed that he and the other medical staff were capable of
treating the patient. He thought that Ms Chan was more concerned
about being sued if something went wrong than about what was
best for the patient. The other medical staff supported Dr Gosling,
and Ms Chan was not prepared to cause conflict by insisting that
the patient be moved. The patient stayed at CHAC and recovered,
but the cost of the intensive care provided was considerable and
created a significant financial problem for Ms Chan.
Yesterday, Dr Gosling came to Ms Chan and told her that he
wanted one of the senior nurses dismissed. He said that the nurse
could not manage her staff, was too concerned about how much
money was being spent on medical supplies and that she tried to
save money at the expense of patient care. He told Ms Chan: 'That
nurse will kill someone one day and you will be responsible'. He
also said that the nurse ignored his orders and did not discipline
more junior nursing staff when they were rude to him.
Ms Chan considered what she had been told and decided that
she would iiot sack the senior nurse. She told Dr Gosling that the
nurse was doing what was best for the healthcare service and for
the patients. She said that she thought it was a personality conflict
between himself and the nurse and that he needed to be 'more
understanding of others' responsibilities'. She said: 'It won't do any
of the patients any good if we run out of money because we just
spend it on whatever we like'.
Today, Dr Gosling emailed the chair of the board tendering his
resignation. In his email to Dr Clark he said that he could no longer
continue in the role of senior doctor while Ms Chan challenged his
clinical judgments and did not give him the respect he deserved.
The chair, Dr Clark, knew that there has been simmering discontent
between the two but did not know things were this bad. He wants to
support Ms Chan as the board thinks she has done a very good job, but
they do not want to lose Dr Gosling as he is a very good doctor and
has strong support from the other medical staff. Dr Clark fears that
if Dr Gosling leaves, many of the senior medical staff will also leave.

DISCUSSION QUESTIONS
l What types of power and what influence tactics are Ms Chan and Dr Gosling using?
2. Dr Clark has arranged separate meetings with both Ms Chan and Dr Gosling to discuss the situation. What advice should he give both
of them? The advice to each of them may be different.
3. If, after talking with the two staff involved, things do not improve, what should Dr Clark do?

•
THE POISONED CHALICE
BY MATIHEW MCDONALD, UNIVERSITY OF NEW SOUTH WALES
Joseph had been a team leader for two years and felt he was ready
to take the next step in his public service career. He had begun
his career as a graduate trainee in the Department of Agriculture
after completing a double degree in commerce and environmental
science. After his traineeship he was offered permanency as a
policy officer, eventually rising to the post of team leader. As a
team leader Joseph felt he had gained the trust and respect of
his four staff members and had learnt the basic skills of being a
manager.
Joseph applied for various management positions within his
own department without success. Undeterred, he applied for
a position in another government department responsible for
environment and heritage and was .successful. The role involved
taking over the position of manager of a 'taskforce' that had been
set up five months previously. The taskforce was made up of 10
team members responsible for developing and implementing a set
of government policies and programs designed to assist primary
producers to manage better the environmental threats to their
land. Joseph couldn't have been happier with his new promotion
and he looked forward to applying what he had learned as a team
leader to the challenges of his new post.
The taskforce itself was divided into two teams. The first
team-the 'policy team'-was responsible for developing policies
in consultation with the minister's office that would underpin
the programs to be eventually rolled out all over the country.
This team was made up of highly experienced members. The
second team-the 'implementation team'-was responsible for
implementing the policies developed by the policy team. The
job of the implementation team was to deal with the logistics
of implementing the programs and working with the numerous
stakeholders involved.
For Joseph, everything started out well in his new position. He
gradually got to know each of the team members, who seemed
skilled and competent in each of their roles. He also began to
understand better the job that the taskforce was required to do.
However, as the days turned into weeks some major problems in
the taskforce began to appear.
The first major problem was thaillther sections within the
department were unhelpful and difficult to deal with when he
made requests of them or sought to initiate collaborations. When
he asked his staff why this was the case, the most common response
was that the department had 'had it in' for the taskforce from
day one because the department members saw the taskforce as
posing a threat to their own positions. The bad blood between the
taskforce and the rest of the department made Joseph's position
--.-1
End of Part-Case Studies PART 3
very difficult because he and his staff were heavily reliant on other~
areas of the department for their expertise, advice and assistance:;_
in order to manage the project successfully. ._, _
The second major problem was _the taskforce itself. Joseph!,~
began to realise that the two teams were highly antagonistic:.
towards each other. This was evident in taskforce meetings, where ;~j
there was an obvious hostility between them. '
Joseph also discovered that very little had been achieved since
the taskforce was set up, and found that it was now well behind the
government's schedule. However, the full implications of Joseph's
predicament became apparent only after a revealing conversation
with Alison, a junior member of the implementation team, while
working back late one evening.
Alison told Joseph that the previous manager of the taskforce,
John, had left the position because of the problems associated with
it. Everything had started out well; however, then the policy team
had begun to treat the implementation team as inferior because
the implementation team members were younger in age, were less
experienced and had made a major blunder in the first few weeks
by getting a national farmers' union offside. After this blunder the
policy team had begun to refer to the implementation team as 'the
idiots'. The policy team had also taken a superior attitude towards
members of other sections within the department because of
their close relationship with the minister's office. This problem
came to a head after a chain of emails had been leaked to the
rest of the department by a member of the implementation team,
who had inadvertently received them. In the emails, members
of the policy team had made disparaging remarks about people
from other sections with whom they had been working. This had
created a furore in the department. As a result, a number of formal
complaints about members of the policy team had been made.
Instead of dealing with this and the other problems associated
with the taskforce, the previous manager, John, had closeted
himself away in his office, hoping they would go away.
Realising that events were starting to get out of control, John's
manager, Max, had stepped in to try and sort out the situation. 1?1'
He had done this by speaking with all of the taskforce members
both individually and as a group. This had made a difference for
a short time; however, the antagonism between the two teams
in the taskforce had eventually returned, and it had seemed
that nothing could be done to repair the damage inflicted
by the leaking of the emails. lt was at this point that John had
resigned. Due to the taint that hung over the taskforce, no one
in the department had been willing to apply for the now vacant
position of taskforce manager. I
After speaking with Alison, Joseph realised he had been handed I
i
a 'poisoned chalice' that nobody else wanted. He became very
worried that the taskforce would not meet the department's and
the government's objectives and timelines, and that he would be
blamed for its failure, adversely affecting his long-term career and
future promotion prospects.
 Organisational Behaviour, Emerging Knowledge I Global Insights, Fourth Asia-Pacific Edition
412 PART 3 Team Processes
DISCUSSION QUESTIONS
1. Using the 'model of conflict processes', identify the sources of conflict between the policy team and the implementation team.
2. Were Max's actions appropriate in this situation? lf so, why? lf not, what should he have done instead?
3. What actions should Joseph take to ensure that the taskforce meets the government's objectives and timelines?
0
STAR ENTERPRISES-
RITA'S ISSUES AT WORK'
BY NUZHAT LOTIA, UNIVERSITY OF MELBOURNE
Rita has been working for Star Enterprises for the last 13 years.
Star Enterprises is a medium-sized auto-parts manufacturer and
supplies parts to one of the largest car manufacturing companies
in Australia. The company has 450 employees. Despite the recent
financial crisis, Star Enterprises has not suffered great losses. This is
due to their commitment to quality and reliability.
Rita started out on the factory floor when she began working
for Star Enterprises as a 20 year old. She has since then worked her
way through to her current position as the senior supervisor in the
Quality Control Department. She has been working in this position
for the last three years. She has moved up to more senior positions
in the company because she is recognised as a hard-working and
dedicated worker who takes great pride in the work that she does.
Rita is one of the most experienced workers in the section and
the quality control manager relies heavily on her knowledge and
experience. She knows almost everyone at the company and has
developed good relations with her co-workers, who rely on her for
support and expertise.
Recently, Rita has been very unhappy with the situation at work.
It all started when her boss, Mr Blake, the quality control manager,
left for a senior position in Star Enterprises' sister company.
After he left, Rita was asked by the general manager if she would
consider working as the acting quality control manager until the
position was filled. Rita was very happy to take up the opportunity.
She had often taken on that position informally in the past when
Mr Blake had been away on leave or professional development.
She had always felt that, being the most experienced person in the
department, it was her responsibility to take on these additional
duties while her boss was away. She felt a sense of pride in doing so.
When the offer of becoming the acting quality contra I manager
was made to her six months ago, she was very excited and felt that
the company had acknowledged her contribution, her experience
and her dedication to her work by giving her this responsibility. She
was also quite happy to take on the position as it meant a pay rise
as well, and she could do with the additional income as she had
recently bought a house and was finding it difficult to manage with
her current income.
i Case study prepared by Nuzhat Lotia, Department of Management and Marketing, University of Melbourne. This case ls not to be reproduced or distributed without
permissiC'._n.
Rita was really enjoying this added responsibility of managing
the department. She had the opportunity to participate in senior
management meetings <1;nd found that she was able to contribute to
the discussions. The general manager was very supportive and would
often drop by her office to make sure she was coping well with the
work, and was always available for a chat if she needed help. While
she had settled into this new role quite well, she was struggling
with managing the budget and finances of the department. She had
never dealt with departmental finances or managed budgets in her
past roles, even when she was informally acting on the manager's
behalf. She felt that she needed some formal training in the area to
enable her to function well in this aspect of the job. She looked up
some short courses being offered by professional development and
training organisations and found one that she felt was perfect for
her needs. The course was a bit expensive, but she felt that it would
be very beneficial despite the cost.
The next day, she approached the. general manager with a
request for funding her to attend the 10-day training. While the
gene·ral manager showed empathy for her situation, he said that he
could not approve this expenditure as they had already advertised
for the position and they would be hiring a manager soon, at which
point she would go back to her senior supervisor role. He explained
that he could not justify the expenditure on Rita's professional
development.
Rita could not believe what she had just heard. She had been
unaware that the manager position was being advertised. She was
very upset and this was obvious from her face. She mumbled,
'I understand' and quickly got up and left the general manager's
office. The truth was that she did not understand; in fact, she felt
betrayed. She had in her heart hoped that her acting role would
eventually turn into a permanent position, as she felt that she had
been doing her job really well except for the budgetary side of
things, which she was quite willing to learn about.
After coming out of the general manager's office, she ran to her
office, locked·the door and started crying. She felt very upset and
angry. She felt that she had always given her best to the company,
but had been let down. At that moment, she decided that if she
was going to be treated so badly then she would have nothing to
do with the company. She would quit tomorrow.
That evening at home, she realised that she could not make
such a rash decision as she could not afford to lose the income.
So, she thought to herself, I will stay, but I will show them what
they are losing out on. She continued to work in the acting quality
 Organizational Behavior, Sixth Edition
460 Additional Cases
mine, I still wouldn't get the bonus. At least I'll get one
more day's pay this way:'
That night, Parker was livid when Millar reported that
he had completed five and a half lengths. Parker had done
ten and a quarter lengths, and Talbot had completed eight.
Boyce proudly announced that he finished seven and a half
lengths, but sheepishly added that Talbot had helped him
with some of it. All that remained were the two and a half
lengths that Millar had not completed.
CASE 2: BRIDGING THE TWO WORLDS-THE ORGANIZATIONAL DILEMMA
By William Todorovic, Indiana-Purdue University, Fort Wayne
I had been hired by Aluminum Elements Corp. (AEC), and
it was my first day of work. I was 26 years old, and I was
now the manager of AEC's customer service group, which
looked after customers, logistics, and some of the raw ma-
terial purchasing. My superior, George, was the vice presi-
dent of the company. AEC manufactured most of its
products from aluminun1, a majority of \Vhich were des-
tined for the construction industry.
As I walked around the shop floor, the employees ap-
peared to be concentrating on their jobs, barely noticing
me. Management held daily meetings, in which various
production issues were discussed. No one from the shop
floor was invited to the meetings, unless there was a specific
problem. Later I also learned that management had sepa-
rate washrooms, separate lunchroon1s, as well as other
perks that floor employees did not have. Most of the floor
employees felt that management, though polite on the sur-
face, did not really feel they had anything to learn from the
floor employees.
John, who worked on the aluminum slitter-a crucial
operation required before any other operations could
commence-had a number of unpleasant encounters with
George. As a result, George usually sent written memos to
the floor to avoid a direct confrontation with John. Because
the directions in the memos were complex, these memos
were often more than two pages in length.
One morning, as I was walking around, I noticed that
John was very upset. Feeling that perhaps there was some-
thing I could do, I approached John and asked him if I
could help. He indicated that everything was just fine.
From the looks of the situation, and John's body language, I
felt that he was willing to talk, but John knew that this was
not the way things were done at AEC. Tony, who worked at
the machine next to John's, then cursed and said that the
I office guys only cared about schedules, not about the peo-
ple down on the floor. I just looked at him, and then said
I that I only began working here last week, but I thought that
I could address some of their issues. Tony gave me a strange
i' look, shook his head, and went back to his machine. I could
f,
I,
ii
r'
ii
I
The job was finished the next morning and the crew de-
mobilized. Millar has never worked for Arctic Mining
Consultants again, despite being offered work several times
by Parker. Boyce sometimes does staking for Arctic, and
Talbot works full time with the company.
Copyright© Steven L. McShane and Tim Neale. This case is based on
actual events, but names and some characteristics have been changed
to maintain anonymity.
hear him still S\Vearing as I left. Later I realized that most of
the office staff were also offended by Tony's language.
On the way back to my office, Lesley, a recently hired
engineer fron1 Russia, approached me and pointed out that
the employees were not accustomed to management talk-
ing to then1. Management only issued orders and made
demands. As we discussed the different perceptions be-
tween office and floor staff, \Ve were interrupted by a very
loud lunch bell, which startled n1e. I was happy to join
Lesley for lunch, but she asked n1e why I was not eating in
the office lunchroom. I replied that if I \Vas going to un-
derstand how AEC worked, I had to get to know all the
people better. In addition, I realized that this \Vas not how
things were done and \Vondered about the nature of this
apparent division between the management and the floor.
In the lunchroom, the other workers were amazed to see
me there, commenting that I was just new and had not
learned the ropes yet.
After lunch, when I asked George, my supervisor, about
his recent confrontation with John, George \Vas surprised
that John got upset, and exclaimed, "I just wanted John to
know that he did a great job, and as a result, we will be able
to ship on time one large order to the West Coast In fact,
I thought I was complimenting him:'
Earlier, Lesley had indicated that certain behavior was
expected from management, and therefore from me. I rea-
soned that I did not think that this behavior \Vorks, and
besides that, it was not what I believed or how I cared to
behave. For the next couple of months, I simply walked
around the floor and took every opportunity to talk to the
shop floor employees. Often, when the employees related
specific information about their workplaces, I felt that it
went over my head. Frequently, I had to write down the in-
formation and revisit it later. I made a point of listening to
them, identifying where they were coming from, and try-
ing to understand them. I needed to keep my mind open to
new ideas. Because the shop employees expected me to
make requests and demands, I made a point of not doing
any of that. Soon enough, the employees became friendly,
 Organizational Behavior: Emerging Knowledge, Global·Reali~;:SJ:d.h Editi.ort
Additional Cases
and started to accept me as one of their O\vn, or at least as a
'i. different type of a management person.
During my third month of work, the employees showed
me how to improve the scheduling of jobs, especially those
on the aluminun1 slitter. In fact, the greatest contribution
was made by John, who demonstrated better ways to com-
bine the most common slitting sizes and reduce waste by
retaining some of the "common-sized" material for new or-
ders. Seeing the opportunity, I programmed a spreadsheet
to calculate and track inventory. This, in addition to better
planning and forecasting, allowed us to reduce our new or-
der turnarounds from four to five weeks to in by 10:00 a.m.
and out by 5:00 p.m. on the same day.
By the time I was employed for four months, I realized
that members from other departments came to me and
asked me to relay messages to the shop employees. When I
asked why they were delegating this task to me, they stated
that I spoke the same language as the shop employees. In-
creasingly, I became the n1essenger for the office-to-shop
floor con1n1unication.
461
One morning, George called me into his office aild
complimented me on the levels of customer service and the
improvements that had been achieved. As \Ve talked, I
mentioned that we could not have done it without John's
help. "He really knows his stuff, and he is good," I said. I
suggested that we consider him for some type of promo-
tion. Also, I hoped that this would be a positive gesture that
would improve the communication between the office and
shop floor.
George turned and pulled a flyer out of his desk. "Here
is a management skills seminar. Do you think \Ve should
send John to it?"
"That is a great idea;' I exclaimed, "Perhaps it would be
good if he \Vere to receive the news from you directly,
George:' George agreed, and after discussing some other
issues, we parted company.
That afternoon, John came into my office, upset and
ready to quit. ''After all my effort and work, you guys are
sending me for training seminars. So, am I not good
enough for you?"
J
 Organizational Behavior, Sixth Edition
468 Additional Cases
CASE 7: THE REGENCY GRAND HOTEL
By Elizabeth Ho, Gucci Group, under the supervision of Steven L. McShane,
University of Western Australia
The Regency Grand Hotel is a five-star hotel in Bangkok,
~! Thailand. The hotel was established 15 years ago by a local
consortium of investors and has been operated by a Thai
;.1 general manager throughout this time. The hotel is one of
:;
:i Bangkok's most prestigious hotels, and its 700 employees
I enjoy the prestige being associated with it. The hotel pro-
rl vides good welfare benefits, above-market-rate salaries,
I and job security. In addition, employees received a year-
I end bonus amounting to four months' salary, regardless of
~'
the hotel's overall performance during the year.
Recently, the Regency was sold to a large U.S. hotel
chain that was very keen to expand its operations into
Thailand. When the acquisition was announced, the gen-
eral manager decided to take early retirement when the
hotel changed ownership. The U.S. hotel chain kept all the
Regency employees, though a few were transferred to other
positions. John Becker, an American with 10 years of man-
agement experience with the hotel chain, was appointed as
the new general manager of Regency Palace Hotel, due to
his previous successes integrating newly acquired hotels in
the United States. In most of the previous acquisitions,
Becker took over operations with poor profitability and low
morale.
Becker is a strong believer in empowerment. He expects
employees to go beyond the guidelines and standards to
: :
consider guest needs on a case-to-case basis. He believes
employees must be guest-oriented at all times to provide
excellent customer service. From his U.S. experience,
Becker has found that empowerment increases employee
motivation, performance, and job satisfaction, all of which
contribute to the hotel's profitability and customer service
ratings. Soon after becoming general manager in Regency
Palace, Becker introduced the practice of empowerment to
replicate the successes that he had achieved back home.
The Regency Grand Hotel has been very profitable
throughout its 15-year history. Employees have always
worked according to management's instructions. Their re-
sponsibility was to ensure that the instructions from their
managers were carried out diligently and conscientiously.
Innovation and creativity were discouraged under the pre-
vious management. Indeed, employees were punished for
their mistakes and discouraged from trying out ideas that
had not been approved by management. As a result, em-
ployees were afraid to be innovative or take risks.
Becker met with the Regent's managers and depart-
ment heads to explain that empowerment would be intro-
duced in the hotel. He told them that employees must be
empowered with decision-making authority so that they
could use their initiative, creativity, and judgment to
satisfy guest needs or handle problems effectively and ef-
ficiently. However, he stressed that the more complex is-
sues and decisions were to be referred to superiors, who
were to coach and assist rather than provide direct orders.
Furthermore, Becker stressed that mistakes were allowed
but he could not tolerate that the same mistakes be made
more than twice. He advised managers and department
heads not to discuss minor issues, problems, or decisions
with him; however, they were to bring important and ma-
jor issues and decisions to him. He concluded the meeting
by asking for feedback. Several managers and department
heads told him that they liked the idea and \vould support
it, while others simply nodded their heads. Becker was
pleased with the response and eager to have his plan
implemented.
In the past, the Regency had emphasized administrative
control, resulting in many bureaucratic procedures
throughout the organization. For example, the front coun-
ter employees needed to seek approval from their manager
before they could upgrade guests to another category of
room. The front counter manager would then write and
submit a report to the general manager justifying the up-
grade. Soon after his meeting with managers, Becker re-
duced the number of bureaucratic rules at the Regency and
allocated more decision-making authority to frontline em-
ployees. This action upset those who previously had deci-
sion-making power over these issues. As a result, several of
these managers left the hotel.
Becker also began spending most of his time observing
and interacting with the employees at the front desk, lobby,
restaurants, and various departments. This direct interac-
tion with Becker helped many employees understand what
he wanted and expected of them. However, the employees
haJ!difficulty trying to distinguish between ~major and
minor issue of decision. More often than not,Wupervisors
would reverse employee decisions by stating that they were
major issues requiring management approval. Employees
who displayed initiative and made good decisions in satis-
fying the needs of the guests rarely received any positive
feedback {r~om their supervisors. Eventually, most of these
employee~lost confidence in making decisions and re-
verted back to relying on their superiors for decision
making.
Not long after the implementation of the practice of em-
powermen@Becker realized that his subordinates ·were
consulting him more frequently than before. Most of them
came to him with minor issues and consulted with him on
 Organizational Behavior: Emerging Knowledge, Global Realify, Sixth Edition
Additional Cases
about minor decisions. He had to spend most of his time at-
tending to his subordinates. Soon he began to feel highly frus-
trated and exhausted, and often he would tell his secretary that
"unless the hotel is on fire, don't let anyone disturb me:'
Becker thought that the practice of empowerment
would benefit the overall performance of the hotel. How-
ever, contrary to his expectation, the busine~and overall
performance of the hotel began to deterioral~There had
been an increasing number of guest complaints. In the past,
the hotel had minimal guest complaints. Now there were a
significant number of formal written complaints every
month. Many other guests voiced their dissatisfaction ver-
bally to hotel employees. Th~umber of mistakes made by
employees had been on an increase. Becker was very up-
set when he realized that two local newspapers and an
overseas newspaper had published negative feedback
469
about the hotel in terms of service standards. He was most
distressed when an international travel magazine had voted
it "one of Asia's nightmare hotels:'
TheEi?ress levels of the employees were continuously
mounting since the introduction of empowermen~.L\_b­
senteeism due tR_..5llness was increasing at an alarn1ing
rate. In addition%mployee turnover rates had reached an
all-time high1CI'he good working relationships that were
established under the old management had been severely
strained. The employees were no longer united and.sup-
portive of one another; instead, they were quick to point
fingers and backstab when mistakes were made or prob-
lems arose.
Note: This case is based on true events, but the industry and names have
been changed.