Professional Documents
Culture Documents
Case 2 OBL
Case 2 OBL
CASE 2
The ABC Company has a long history of success. The company has been at the fore front in the
development of information technology since the 1970s and led the market in technology
development, manufacturing and sales throughout the 1980s to the mid-1990s. ABC Company
was a success story. They consistently met or exceeded their profit targets, successfully integrated
new technology into their products, and they were considered one of the best employers in the
country. With generous benefit packages, a high quality of work life, industry leading salaries,
and a corporate culture that considered its employees to be part of a family, potential employees
were lined up for opportunities to join ABC company.
However, with the advent of globalization, freer trade, and low cost overseas labor, ABC
Company found itself slowly losing market share for its primary product: computer hardware.
ABC Company had prided itself on producing and selling the best products and training its sales
force to develop long term relationships with clients that brought them back year in and year out
for ABC Company’s technology. Along with hardware, ABC Company also sold service
contracts and training classes for the end users of their products. By the late 1990s it became clear
to the leadership at ABC Company that they could no longer compete with less expensive
products being produced overseas. At one time they could sell their higher priced goods on the
premise that they were of higher quality, but that was no longer the case. Foreign-made products
were now being produced to match or even surpass the quality standards set by ABC Company.
However, conversations between sales representatives and their clients did indicate one thing: the
clients valued the personal interaction they had with the sales reps and the personalized advice
that they could provide to their clients to help them to reach their goals. ABC Company
recognized that they needed to make a change and they believed they had a new vision for their
company.
As they entered the 21st century ABC Company moved away from hardware solutions to
business challenges and shifted instead towards knowledge-based solutions. Rather than selling
equipment, ABC Company began to market the extensive knowledge of their workforce. ABC
Company would no longer sell the equipment; they would instead provide integrated knowledge-
based solutions to information management problems. Essentially they would become a
consulting firm that would assist their clients to set up systems that would facilitate information
management. But now their solutions would go beyond hardware and encompass software,
organizational design, data collection management, work flow and overall information
management re-engineering. Sales reps underwent significant training to prepare them for their
new roles. However, the redesigned jobs were not a good fit for all of the sales reps. some moved
on to other types of positions within the company, but others left to pursue opportunities
elsewhere.
As expected, profitability declined during the initial introduction of this new organization mission
as employees became accustomed to their new roles. Due to the time taken to train employees,
they were spending less time in the field with their clients generating revenue and more time in
the classroom being oriented to their new roles. However, the decline persisted much longer than
anticipated and the company’s leadership team, board of directors and the shareholders were
growing impatient with the slow returns. It became increasingly apparent that while the training,
resources, and equipment were in place, significant changes in the organizational behavior system
at ABC Company were necessary to ensure long term success.
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Case Questions
You are to assume the role of a consultant hired by ABC Company’s leadership when answering
the questions to this case. You should focus on making specific, detailed recommendations to
assist the company in achieving its goal of effectively implementing its new business model.
Responses to the questions should reference theories/concepts/processes that will help the
company and its employees to adapt to the new direction and new work environment. Do not just
reiterate a theory; explain how it applies to the case and why it is the best approach.
Responses are graded on both the effectiveness and relevance of the recommendations as
well as the quality of the explanation that accompanies each recommendation.
1. The case indicates that ABC Company has traditionally had a “…corporate culture that
considered its employees to be part of a family…”. Do you believe that this is the best culture
for the organization going forward? Why or why not?
2. As the sales representatives at ABC Company take on their new roles in the organization
some are very excited about their new positions and new opportunities for growth, while
others are reluctant to assume these new responsibilities. The level of motivation to excel in
the new position varies among the employees. Using expectancy theory and equity theory,
explain why two employees may have entirely different reactions – one works harder than
ever while the other decreases effort. Use each theory to explain each reaction – in other
words, use expectancy theory to explain why one employee would increase effort and why
the other would decrease effort and then provide the same arguments using equity theory.
3. ABC Company must develop a new reward system to facilitate the transition to its new
business model. Rewards will play an important part in achieving employee buy-in. What
recommendations would you make to ensure that the organization incorporates both extrinsic
and intrinsic rewards? How important is it for managers to understand the individual needs of
their employees in administering the reward system?
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5. Based on the information provided in this case, it appears that the anticipated change at ABC
Company has stalled. Discuss why employees may be resisting this organizational change
and how it can be overcome. How can ABC Company build employee support for the
change? How would you implement Lewin’s three –stage model for change?
While these five questions provide a starting point for analysis, other areas to consider
include communication, work design, conflict management, stress management and team
development.