CASE4

"Looney Tunes on Parade"

Part I: Getting Started on the Right (or Left?) Foot

Introduction
Republic Insurance Company is a regional, all-purpose firm with offices in a
three-state area. The central headquarters office houses the staff that plans and
controls the field-office operations. Because the company is in such a competi
tive industry, sales play a very important role in Republic's efforts.
The group responsible for planning and controlling the sales effort of Re
public's three-state field force is the Strategic Management Division. There are
two main components of the Strategic Management Division:
1. The Accounting Department pays the bills and keeps track of the in
come.
2. The Plans Department does the marketing, product and price studies,
profit, budget planning, and similar duties.

The organizational chart of this Strategic Management Division is shown below.

It depicts the structure of the division and the leadership roles within that struc
ture which have a bearing on this case. It also includes the names of the indi
viduals who filled those leadership roles in June, 1987, the time at which the
events in this case begin.

STRATEGIC MANAGEMENT DIVISION

Division Head: Sam Benson

I
Plans Accounting

Manager: Peter Gilmore

I
Budgets Unit Pricing Unit

Supervisor: Sandi Bates Vacant

4.1
Fifty Case Studies for Management & Supervisory Training

The manager of the Plans Department is responsible for two units: Budgets
and Pricing. Each unit has a supervisor who is responsible for the projects arid
tasks assigned to the unit. The Budgets Unit does long-term planning and evalu
ation of the profit and cost centers of Republic, and coordinates the overall
budget planning for the entire company. The Pricing Unit is responsible for
keeping track of the competition's prices on insurance policies, company-wide
profit-forecasting, and other special studies about company products or costs.
The Pricing Unit regularly provides these studies to other units and divisions
within the company. These studies supply essential information to the managers
of these other departments so that they can make their own business and
budget ing plans.
In June of 1987, the Strategic Management Division was headed by Sam
Benson. Peter Gilmore, who had been with Republic for 10 years, managed the
Plans Department's two units. The Budgets Unit was supervised by Sandi
Bates, and the Pricing Unit's supervisory position was vacant.
In that same month, Peter Gilmore received a referral from Personnel for the
open supervisor's position in the Pricing Unit. The job candidate's name was
David Randle. Randle had a resume that looked good (see the copy of the re
sumee on the following page), and Gilmore managed to squeeze him in for a
20-minute interview between business meetings. The manager talked in general
about the job and asked Randle about his resume. He found Randle personable
and easy to get along with, liked the candidate's background, and decided to of
fer him the job. He told Personnel to hire him and take care of the details.
Randle began work a week later, on July 1, 1987, as supervisor of the Pric
ing Unit. He had two cost analysts and a secretary reporting to him.

CASE QUESTIONS
1. Evaluate David Randle's resume.
2. Evaluate the selection procedure used by Peter
Gilmore.
3. Anticipate any effects of the selection procedure
used by Peter Gilmore on David Randle' s future per
formance.

4.2
 Case 4: "Looney Tunes on Parade"-Part 1

DAVID RANDLE
5634 Watercrest Street
City, State12345

EDUCATION State University

The Evening College Program
B.S. in Business
3.75 GPA, 3.8 in major 1978-
1984

PERSONAL Born: October 9, 1957 Married

Fluent in four languages:
Spanish, French, Italian, Portugese

WORK HISTORYSmith Stores

January 1987 - date
Cost Accountant: supervises Cost Unit, profit­planning, budget coordination
for the stores

Johnson Adhesives Manufacturing

February 1986 - July 1986
Price Analyst: developed and supervised computer records, inventory
controls, payrolls

Safety Media Films

January 1983 - February 1986
Price Analyst: budget planning, international finance, financial planning

Bander Food Chains

November 1981 - January 1983
Senior Bookkeeper: price studies, computer records, supervision

Get Smart Book Publishers

February 1981-- November 1981
Junior Bookkeeper: payroll accounts, accounts receivable, payable, general
ledger, audits.

4.3
Fifty Case Studies for Management & Supervisory Training

Approaching the Job of Supervisory Leadership

Peter Gilmore was a capable, energetic manager with the Republic Insur
ance Company. He began his career with Republic some 15 years ago, after
graduating with an accounting degree from the night-school program at City
University. He was personable, well-liked, and bright.
Peter worked hard and diligently, regularly putting in IO-hour days and
work on the weekends. Because of his dedication, Peter had been rewarded with
ever-increasing responsibilities and promotions. He was now serving effectively
as the second in command in the Strategic Management Division.
Peter once summarized his supervisory philosophy and practice in this way:
"You know, every time my boss gave me an assignment, I always worked as
hard and as fast as I could to complete it perfectly and on time. I expect the
same from my subordinates: If I give them something to do, I expect the same
from them-it should be done correctly and on time. I can't take time to check
up on them or see if they are doing it."
Peter's management practices were good to his word: He delegated projects
easily and would expect them to get done. When he handed out an assignment,
he didn't expect to have to deal with it again until the employee brought back
the completed task within a reasonable time.

CASE QUESTIONS
1. For this type of supervisory leadership to work suc
cessfully, what kind of relationship must Peter Gil more
have with his subordinates? What characteris tics must
the employees possess?
2. What kind of problems, if any, might you expect
from this kind of supervision?
3. What general kinds of supervisory actions should
Peter Gilmore be taking?

4.4
 Case 4: "Looney Tunes on Parade"-Part 1

Getting Things Under Control?

After a month or so of orientation and break-in, Randle was regularly given
assignments by his boss, Peter Gilmore. For example, one major assignment Pe
ter gave to Randle involved proposed price changes in Republic's line of life in
surance policies. These policies were a major income producer for Republic.
Recent changes in the prices for similar products by the competition were be
ginning to put pressure on the profit margins of these products. Republic needed
to maintain a strong and sound competitive posture in this sales area. This was a
major, long-term study that would take about six or seven months to complete.
During the period in which Gilmore was trying to hire a supervisor, he "baby
sat" the project. Once Randle was hired, Gilmore was more than happy to tum
the project over to him.
Gilmore would give these studies and assignments to Randle and expect
them to be done. Since many of these reports were prepared for other depart
ments in the company, Gilmore did not necessarily see them once they were
done.
In addition, it turned out that Gilmore and Randle lived in the same part of
town. Shortly after Randle was hired, he and Gilmore started commuting to
gether to and from work. Gilmore felt that Randle had ample opportunity to talk
with him if there were any problems or questions.
There had been a series of problems in the Pricing Unit, though, not long be
fore Randle was hired. Work was not getting done properly through the unit,
and at first no one knew why. Sam Benson (the head of the Strategic Manage
ment Division) finally determined that these problems had developed because
requests for work were made directly to the Pricing Unit from other depart
ments. Benson issued a standing order to the other divisions in Republic that the
Pricing Unit would no longer take work requests directly from other depart
ments. Instead, the requesting department had to submit their work order di
rectly either to him or to Peter Gilmore for initial approval.
Randle learned of this rule very quickly. When managers approached him
for work assignments, Randle told them: "I'd really like to help. But you know
the rule that Sam Benson laid down. You need to discuss the project with him."
During Randie's first six months on the job, everything seemed to be going
fine. Gilmore would give Randle assignments and, not hearing anything to the
contrary, would assume that the projects were being done. As far as Gilmore
knew, all was well.

CASE QUESTIONS
1. Did Gilmore need to establish any controls over the
work of David Randle? Did Gilmore have adequate
controls over the work?
2. What kind of control should Gilmore have estab lished
over the work of Randle and the Pricing

4.5
4.6
CASE 5
"Looney Tunes on Parade"
Part 2: Kicking Into Gear

Background Information
Peter Gilmore, manager, hired David Randle in July, 1987, to supervise the
Pricing Unit of Republic Insurance Corporation's Strategic Management Divi
sion. The Pricing Unit conducted important studies about the competitive pos
ture of Republic's various policy products. Once Randle was hired, Gilmore
delegated assignments to Randle often and easily. Gilmore expected these as
signments to be completed and returned on a timely basis, although he did not
check on progress during the interim.

Flares in the Night

In December, 1987, six months after he was hired, things still seemed to be
going smoothly for the new supervisor of the Pricing Unit, David Randle-at
least on the surface. Nonetheless, Peter Gilmore was feeling uneasy. As he later
put it: "It was nothing I could put my finger on exactly. I just didn't feel com
fortable trusting him." In fact, Gilmore had been receiving some information
about Randle that was giving him some pause for concern.
One source of this information was supervisor Sandi Bates. Sandi, David
Randle' s counterpart in the Budgets Unit, also reported to Peter Gilmore. It be
came clear not long after Randle was hired that he and Sandi Bates simply did
not get along. Gilmore was not too concerned, feeling the problem was just a
difference in personalities. There were periodic flashes of anger and occasional
back-biting. Finally, in January, Gilmore lost his patience and told the two of
them: "I don't want this fighting anymore. You two work out your differences
and get this squabbling resolved."
In early March, Sandi Bates asked to see Gilmore privately. She told him
that she had tried to resolve these problems but with little success. She also told
him that Randle was "screwing up" some of the projects Gilmore had given
him. Gilmore asked Randle about these "screws-ups" a few days later. Randle
conceded that he had been having some difficulties because of family problems.
Gilmore took him at his word but still felt uneasy.
In mid-March, a second matter of concern developed. The source of this
concern was Randie's new sideline venture: a mail-order supply business that
he had started with his brother-in-law in February. Randle would occasionally
so licit other employees in the headquarter' s office for orders. Gilmore was
amused
5.1
Fifty Case Studies for Management & Supervisory Training

at first, but in mid-March, employees started calling his office to complain that
Randle was not filling their orders.
By April, 10 months after Randle had started with Republic, Peter Gilmore
was definitely bothered by David Randle. He wondered to himself: "What's go ing
on here? Is Randle too busy, or is he incompetent, or what? Something just isn't
right."
To deal with this concern, he talked with Randle and asked the supervisor
to complete a long self-assessment form he had picked up at a conference a few
year's earlier. It contained a list of skills for accountants in project management.
The person completing the assessment rated his or her current skill levels on a
scale of 1 to 7. Gilmore wanted Randle to identify any job performance weak
nesses he might have and to start improving them.
Randle filled out the form and told Gilmore that the assessment was very
helpful and that he could see performance areas he needed to improve immedi
ately. Sure enough, Gilmore seemed to notice some improvement in Randle' s
work during the next few weeks.
Discussion Questions

CASE QUESTIONS
1. What was happening at this point?
2. What should Gilmore do at this point?

5.2
Case 5: "

5.3
 Case 5: "Looney Tunes on Parade"-Part 2

Changing the Guard

Sam Benson had been head of the Strategic Management Division at Repub
lic Insurance for nearly six years. He served well in this capacity, capping a 30-
year career with Republic by retiring in April, 1988.
Sam was replaced by Henry Carpenter, 41. Henry had been with Republic
for almost three years, serving as chief information management officer. Car
penter moved into Sam Benson's office during David Randie's eleventh month
with Republic, in May.
It seemed to Peter Gilmore that from that day forward, Randle spent a lot of
time with Carpenter. He could often be found in Carpenter's office, no matter
what time of day it was. They would have lunch together or go out for drinks
af ter work. Beyond these social contacts, Carpenter began assigning projects
di rectly to Randle. Often these assignments were made without Gilmore even
knowing about it. Gilmore, who suspected as much, was too busy to give the
matter serious thought. "What the hell," he told himself. "Let Henry work with
him, too."
Not long after, though, when Randle was on vacation, an incident occurred
which convinced Peter Gilmore that his vague intuitions about something not
being right with David Randle were well founded. Sometime earlier, in April,
Randle had conducted a performance evaluation of Betty Moore, one of the cost
analysts in Randie's Pricing Unit. During the evaluation, Randle promised to
make Betty a supervisor and arrange for her to receive a 20 percent salary in
crease. (In fact, Republic had a policy that the maximum salary adjustment to
which anyone was entitled during a six-month period was 14 percent.) By May,
when Betty saw no change in her salary, she met with Gilmore privately. Betty
had worked with Gilmore for over four years.
Betty began: "You know, David did my performance appraisal two months
ago, and he promised me a supervisory promotion and a 20 percent salary in
crease. But I haven't received either yet. Is there something wrong?"
Gilmore was surprised. "David promised what?" he asked in astonishment.
He was very aware of the firm's policy on salary increases and knew that David
Randle was also aware of them.
Betty repeated her comments. As Gilmore listened to Betty's explanation,
his anger rose. When Betty finished, he called Bill Schmidt to join them. Bill
was Betty's colleague and the other cost analyst that Randle supervised.
Gilmore said, "Bill, Betty has been telling me some things which I find
very distressing about David's management practices. Tell me what's going on
there."
He got an earful. The analysts told him that Randle never gave them any
work to do on any kind of regular basis. They did not know what he did with
the assignments he received from Gilmore or Carpenter, but every so often,
Randle would give them a real rush job on a big project and then pressure them
until it was finished. When Randle finally received their report, he would put
his name on it and pass it along.
Peter Gilmore now became very angry. He thanked Betty and Bill for their
honesty. As soon as they left, he walked into Henry Carpenter's office and
made three points: "One, I don't trust Randle, and I may want to fire him.
5.4
Two, I

5.5
Fifty Case Studies for Management & Supervisory Training

think you and Randle are getting way too close. And three, in the future, tell me
if you make any assignments directly to Randle." Gilmore's irritation was obvi ous,
and Carpenter patiently waited for him to calm down. Gilmore then told Carpenter
what he just learned from Betty and Bill.
After returning to his office, Gilmore phoned Randle at his home. Randle' s
wife answered the call, and told him that Randle was not available.
Gilmore said pointedly: "Tell David that we will not be commuting to work
anymore together."
Sensing something in Peter's tone, Mrs. Randle started talking about all the
family problems David was having. Gilmore ended the conversation as quickly
as possible.
Randle was now approaching his first year's anniversary with Republic In
surance, and his performance appraisal was due. When he returned from vaca
tion the following week, the evaluation was waiting (see the following page for
Gilmore's appraisal of Randle). During the discussion, Gilmore told Randle that
there had better be improvement in his performance-or else.
Again, Randle seemed to make a recovery. He came into work early,
worked hard and stayed busy, was quiet, and stayed late.
But Gilmore was watching him closely now.

CASE QUESTIONS
1. What are the problems at this point?
2. Evaluate how well Gilmore is handling these prob
lems.
3. Recommend how he should deal with the problems.
4. Evaluate Gilmore's performance appraisal of
Randle.

5.6
 Case 5: "Looney Tunes on Parade"-Part 2

Republic
Insurance
Employee Evaluation
Employee: David Randle Supervisor, Date:June 1988
Position: Pricing Unit
Manager: Peter Gilmore

Describe the employee's overall performance.

David has the skills to become one of the top performers of this
division. However, during the past year, he has done only a
satisfactory job.

Describe the employee's work habits and accomplishments.

David usually finishes his work on time. He has a strong tendency
to let projects slide and then try to get them done at the last
minute.

Future skills development plans.

Improve knowledge of insurance and accounting. Develop career
plan.

David Randle /s/ Peter Gilmore /s/

5.7
CASE6
"Looney Tunes on Parade"
Part 3: A Time for Action

Background Information
Just over a year after Peter hired David Randle to supervise the Pricing Unit
Department of Republic Insurance's Strategic Management Division, he was
faced with a number of problems. The initial period of smooth sailing had dete
rioriated as revelations about Randie's questionable conduct had surfaced. In re
sponse to these revelations, Gilmore completed an appraisal of Randie's job
performance, warning him that he needed to make improvements in this area.
Gilmore was now watching Randle closely.
Gilmore's new "get-tough" supervisory style yielded a number of results. It
was now early July, 1988, and the Life Insurance Line Price Study for which
David Randle was responsible was a few month's overdue. The head of the
Customer Services Division had called Gilmore last week to ask him where it
was. This time, Gilmore knew to ask Randle for it.
David Randle said it would be ready the next day, and sure enough, the fol
lowing morning it was on Peter's desk. At an early-morning coffee break, Peter
asked Betty Moore if any of the cost analysts had prepared this report. Betty re
plied, "No, David did it all himself late yesterday afternoon."
Peter started to read the report, and one thing immediately became
apparent: The numbers and calculations did not seem correct. And there was
something else that wasn't right about the report. At first, he just couldn't figure
out what it was; then he remembered. He went to his bookcase, pulled out the
February, 1986, issue of Life Insurance Digest, and there it was: David
Randie's report or rather, the Digest article that David Randle had copied and
used for his re port.
Gilmore talked with Carpenter that afternoon, and both agreed that Randle
must go. The next morning, Randle was sitting in front of Carpenter and Gil
more in Gilmore's office.
Carpenter began: "David, a week ago when we discussed this price change
study, the figures you gave me were quite different from the figures in this re
port. What the hell is going on?" Carpenter was angry, and his tone harsh.
Randle shifted in his chair. "Well, er, the figures I gave you were still tenta
tive. They were, ah, still estimates." Randle did not look at either of them and
fidgeted slightly in his seat.

6.1
Fifty Case Studies for Management & Supervisory Training

Carpenter continued: "The Knilson Actuarial Count equation is a basic for

mula for computing the real market pricing for our life insurance policies. 1
want to see you do it, here, now!"
Randle was now visibly shaken and said lamely: "Well, Hank, as you know,
I'll need my work papers. Let me go back to my desk, I don't want to take your
time ... maybe there is a specific error I made that-"
Carpenter cut him off: "No sir, here and now. We'll supply you with the in
formation. Use this pen and pad of paper." Carpenter pushed the items towards
him.
Randle picked up the pen and began writing down some numbers. After a
minute, he looked up and started to explain his results.
Gilmore interrupted him: "David, you don't know what you're doing.
You've got two of the basic parameters confused, and you just don't know what
the hell you're doing .... You copied this article virtually verbatim from the
Life Insurance Digest, didn't you?" Gilmore pushed the article across the desk,
in front of Randle.
Randle was stunned.
Gilmore said, "Let's go to Personnel, David. You no longer are an
employee of Republic Insurance."
At 10:30 a.m., David Randle walked to the street in front of the Republic In
surance Company, and by 10:45 a.m., he was no longer in sight.

CASE QUESTIONS
1. Evaluate the termination procedure used.
2. Are there any legal considerations in releasing David
Randle in this manner? Are there any legal grounds
for prosecuting David Randle?
3. What should Gilmore do now with his staff?

6.2
 Case 6: "Looney Tunes on Parade"-Part 3

Post Mortems
Later that morning, after Gilmore told his staff that Randle was fired, Gil
more and Betty Moore cleaned out Randle's desk and files. When they were
fin ished, they assembled a pile of papers over a foot high. These papers were
all the projects and assignments Gilmore had given Randle over the past year.
They had been thrown in drawers, in cabinets, wherever-and had not been
touched.
About a week later, Gilmore received a rather alarming report from another
Republic employee. This employee had been to Randle' s house earlier in the
day to pick up a mail-order shipment. While she was there, Randle made a
com ment that was a threat on Gilmore's life. Gilmore told Carpenter, and
Carpenter called Randle' s house, demanding an explanation. Carpenter
threatened to call the police. Randle laughed and said he was only joking.
The circumstances surrounding Randle' s termination alerted the Personnel
Department, who proceeded to investigate what had happened more carefully.
Upon reviewing their files of David Randle, they found out two rather disturb
ing facts. First, Randle had been fired from every job he had held as an adult.
This fact was hinted at in the standard background check conducted by a
private investigator. At the time the report was submitted, though the references
had been indecisive (see report on following page). Second, it was also
discovered that, contrary to the information in his resume, Randle had attended
State Uni versity for only one year and did not have a bachelor's degree.
When Gilmore learned of these last tidbits, he just smiled, shook his head,
and said: "Looney tunes on parade."

6.3
Fifty Case Studies for Management & Supervisory Training

ACME PERSONNEL INVESTIGATIONS

UNDER CONTRACT 1987-482 TO REPUBLIC

INSURANCE

CONFIDENTIAL

Date _
Applicant: David Randle

Smith Stores: 1/1987 to date

Payroll clerk verifies applicant was employed from January to June as
a Cost Accountant. SSN verified.

Johnson Adhesives Manufacturing: 2/1986 to 7/1986

Personnel Clerk verifies applicant employed as Price Analyst from
February 1986 through July 1986. SSN verified. Applicant was laid
off due to cost cutting.

Safety Media Films: 1/1983 to 2/1986

No listing found for the above place of business. Apparently it is out of
business.

Bander Food Chains: 11/1981 to 1/1983

Account Manager verified that applicant was employed from November
1981 to December 9, 1983, as a Senior Bookkeeper. Apparently, his work
was satisfactory as nothing in the file is derogatory. It was noted that he
was discharged. However, this was probably due to a change
in supervisors at that time.

Get Smart Book Publishers: 2/1981 to 11/1981

Clerk verified that applicant was Junior Bookkeeper from February
1981 through November 1981. This was all the information she could
give over the telephone.

6.4