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Micro Exam Preparation (Colour coded)
Values, Attitudes and Behaviours Conflict and Negotiation Teams and Leadership Reflective examples in Chronological Order Timeline Micro Topic Theory and Example Formation of group Values, Attitudes and Behaviours Compliance: The formation of group for our team assignment was allocated by our tutor based on a personality test taken online. This clearly shows a compliance as there is an external coercion involved since it is against the student’s will as they would have definitely chosen to form their group themselves. It is the result of an instruction and rule of the OB course. Team contract Values, Attitudes and Behaviours Compliance: Every team was also forced to form a team contract since it is a hurdle and the consequence of the failure of doing so would mean that a punishment would be given where the team assignment would be graded a fail. A few members of my team met up after the tutorial to form the draft contract. Conformity: Everyone agreed readily that they were willing to put in a huge amount of effort in the group assignment to achieve the goal of H1. This might have been because of social facilitation for the others since majority of the group was already very keen on putting their all into the assignment for a score of H1. There might have been an internal acceptance by every member whether it was involuntary or not. Values: Everyone had the same terminal values which are to graduate and obtain a good job. To achieve this, our instrumental values were to work hard in our degree to graduate with flying colours, in this case now which is to score a high mark for our OB team assignment. We also ranked our values in terms of the content (trivial/important) and intensity (and how strongly we hold them). We place utmost importance in responsibility, diligence and honesty while doing this assignment as we needed everyone to complete their parts to a high standard and avoid any forms of plagiarism. *Possibly add in whether values change throughout the whole assignment and whether Tuckmans model was consistent. Not always in order.
Conformity and values: Social pressure lead me into behaving in ways that counter my personal values in order to “fit in”. I value punctuality. There are times where we plan to meet up at a certain time but one of the members would message the group, saying that he would be late, and other members are nonchalant about it. Instead of hurrying him up, I told him to take his time to get there. Lol. (Add in specific examples in the reflection!) Attitude: evaluative statements that relate to a specific proposition. From attitude to behavior: May be consistent or inconsistent (cognitive dissonance) Inconsistent Affective component: I am unhappy with teammate Cognitive: The teammate constantly comes late for meetings and have no punctuality Behavioral: I will not pester the teammate to be more punctual or show my dissatisfaction Consistent Affective: I think the discussions are sometimes unproductive Cognitive: The group gets distracted very easily with other topics Behavioral: I form agendas and always try leading the discussion back to it Low-Context culture: Currently there is a low context culture happening since the shared values and agreements are written down in a contract to be signed. The relationships between the team members and personal involvement is not as valued?? Conflict and Negotiation Conflict involves two or more parties and can be overt or covert. There are different types of conflict: Process conflict: Disagreements about how work should be organised and accomplished. When deciding on the place to hold our weekly group meetings to complete our assignment, one of our members persistently suggested his own student accommodation that had study area facilities. It was unfair in the sense that the rest of us had to travel a distance to his place and there was also no stable wifi. Managing conflict through negotiation Intergrative bargaining : Intergrative bargaining is used when resolving conflicts during the team assignment by dividing variable resources. This is to strive towards a win-win situation in order to reduce the level of insatisfaction between the members. It also has a longer term focus so that the conflict does not arise again and a convergence of interest will acknowledge both parties’ point and focuses on regrouping the team into one unanimous voice again.
Process conflict: Another process conflict that occurred was when one of the members was proofreading another member’s work. Instead of inserting comments in Google Docs or informing about the parts that he thought should be edited or rephrased, the sections were deleted completely with no consent. This caused a brief conflict as it was indirectly disrespectful to the other member because it would seem that their opinions do not matter. The disagreement on how the proofreading should be done was finally settled on placing comments externally. (Low level of process conflict is considered beneficial, because it stimulates healthy competition and motivation among individuals. However, intense arguments should be avoided. Moreover, process conflicts can easily lead to jealousy, loss of motivation and job dissatisfaction. Therefore, it should be kept to a minimum level.) Relationship conflict: Interpersonal tensions among individuals that have to do with their relationship, not the task at hand. One of the relationship conflicts that occurred was that one of the members could not collaborate and write together with another member as they are both too dominant with their ideas. This is one of the task conflicts that crept into relationship conflicts. Both of these members negatively impacted each other and were too stubborn to listen to each other. It significantly delayed the writing of the halo effect bias. Relationship conflicts are usually the reason of different personalities, attitudes and perceptions. It is volatile and counter-productive nature, thus relationship conflict is considered completely destructive and harmful. More like a reflection, can name person A person B. Part B Editing, proof reading, final touches Conflict and Negotiation Task conflict : Two members of the team did not bother citing and referencing their parts properly. The referencing had to be done again by myself to keep it to a high standard. This task conflict was one of the non-healthy conflicts as it gave a sense of distrust and frustration with their lack of standards and effort in the task.
Macro OB
Case Studies
Section Page
Enron 6
Apple 25
Solariz/Supernova 40
Automakers 54
Sanrizz 67
- WHAT needs to be changed (PROBLEM)
- WHAT type of intervention is needed? (SOLUTION)
- HOW will you implement the change? Strategy: Profit level and product positioning (to differentiate itself and generate profit) Make the vision and strategy of becoming the energy trader and embracing the free market and transform the whole organization based on these principle Unfreeze: Explain the new strategy, what the employees should do to achieve it (implement the money- generating based actions) Strategy: High energy price, the plumetting share price, the accounting fraud case, notorious reputation of enron For the goverment: strategy: soaring natural gas price - Stop manipulating the origin of the energy (make it as if it came from overseas to be able to set much higher price), - stop doing overschedulling (make as if the pipelines are really congested/highly booked to encourage retail energy provider to pay the congestion fee, which is required to fasten the energy distribution process), - stop limiting energy supply (take power plant offline for maintanence during high demand so artificial shortage occurs and therefore enron can sell much higher price to the individul utility grid managers at the spot market) By the goverment: open up new factories, enable the state to buy froom the energy retailers. Unfreeze: Explain the the money-generating based action is actually a wrong and dishonest strategy, explain how to handle it, and change the
- HOW will you monitor the result Change: - Implement a strict and gruelling selection process (to get obidient, hardworking, money makers who compete between each other and leave everything they have got behind, ie. family) - Make an image of enronian (embrace the evangelican mission to transform the company, are the best employees in any companies, contributing to the society) - Prohibiit criticism, opinion, ideas, and feedback (in order to easily making sure that goals are implemented quickly) Refreeze: Give punishments (reassign, cut bonus)and rewards for underachieving and excellent employees (give bonus, free holiday) Do a really tight performance appraisal future value of the comany to be the hones and ethical conducting company By the goverment: explain that enron misconduct has cause a great sufference for california people and make a great economic crisis, explain the impact of this crisis on enron Change: - Stop manipulating the origin of the energy, stop doing overschedulling - stop limiting energy supply - start increasing the energy supply, follow the appropriate market dereggulation practice (leave the supply and demand to the market and not doing any intervention on it) - Find the person who did the accountinig fraud and get back the money that he took from the company By the goverment: open up new factories, enable the state to buy froom the energy retailers, regulate all of the energy providers (wholesellers and retailers) Refreeze: Make strong regulation on further energy manipulation - Have better communication among all levels of managements and acroos divisions,
Change theory example questions
1.1 Using the Six Silent killers theory of organizational change, analyse what went wrong with the change program? Explain your answer and use examples from the case to illustrate your answer.(25%, 30min) 1.2 Based on the model of unfreezing- changing-refreezing of organization change analyze what went wrong with the change program? Explain your answer and use examples from the case to illustrate your answer. (25%, 30min) 1.3 Using the model for management change develop the change plan for Enron. Explain your answer and use examples from the case to illustrate your answer.(25%, 30min) Recommendations (depend on the question) 1.4 Using the concept of “ Organizational fitness profiling ”, provide recommendations for how the change at Enron could have been changed to facilitate and improve the change process.(25%, 30min) 1.5 You could also use the principles of effective management in the case study(p176) Answers: 1.1 Using the Six Silent killers theory of organizational change, analyse what went wrong with the change program? Six Silent killers are mutually reinforcing barriers that block strategy implementation and organizational learning. The six silent killers are listed below:
- Senior management style is either too top down or too laisser faire
- unclear strategy / conflicting priorities
- ineffective senior management team
- poor vertical communication
- poor horizontal coordination (across functions, businesses or borders)
- inadequate skills at lower levels (1) At Enron, the management style of leaders is too top down. As mentioned in the case, communication was essentially one way-from the organization’s top leaders to those at the bottom of the company. Its purpose was to reinforce the demanding goals set by Enron’s leaders. Corrective feedback was not sought. (p5) The leader took decisions prior to consulting and made individual deals. Another example of the top-communication was the code of ethics email sent by Ken Lay (chairman at 2000); employees were not encouraged to communicate upwards and certainly not in the form of negative information. Criticism of the company was not tolerated. Fusaro & Miller argued that Enron created an environment where employees were afraid to express their opinions or to question unethical and potentially illegal business practices. (p7) because the rank-and-yank
system was both arbitrary and subjective, it was easily used by managers to reward blind loyalty and quash brewing dissent. (2) Unclear strategy / conflicting priorities? Initially, the strategy appeared to work and very clear that “ with deregulation, Enron was able to enter electricity markets where even more opportunities awaited them ” (p3) But after Skilling’s departure in 2001, the company was unclear about their strategy. (3) Since the CEO doesn’t deliver enough information, their leader doesn’t know where they are going; and it is not clear that there will be enough money to get them there. As a result, employees are highly anxious-they don’t know where they are going. (4) Other managers know that senior managers are not open to discussion so they don’t bother to try to communicate. The company use bottom-up business ideas and autonomous nature of this initiative meant that senior managers were often not aware of what was going on. For example, Skilling (CEO at the time) knew nothing about Enron Online until an ad hoc group of 250 people were ready to launch the online business. (p3) During the major presentation after Skilling’s departure, he does not explain the situation fully. Robert, while inclined to believe the CEO, mentions “dark rumors” because of a lack of information. Absences of communication are also very important in shaping this culture, which is one, that lack of trust. Both Amy and Gary indicate that they get no information from their managers, indicting a lack of communication and trust within the divisions. (6) Since skilling recruited hundreds of outsiders to bring in new thinking, the company experience inadequate skills at lower levels. Young undergraduates and MBAs found themselves empowered to make multi-million decisions without higher approval. (p4) Company can experience major loss during the trading.
One-off change programs follow a three-step process of preparing the organization for change, changing the organization and then incorporating the changes within the processes of the organization. This process has in the past been referred to as unfreezing-changing – then refreezing. After Lay became the CEO, he was trying to change Enron from a natural gas company into a new one which deals with new products and services. It started to experience unfreezing process. When Enron was changing, Lay was clearly understanding of what is involved in the change and what kind of change he wanted to make. Afterwards, in the first place, he hired many young employees who were graduated from university. Then, he started to change the structure of Enron (p3 figure 1). A new kind of reward system called rank-and-yank had been created. A new product and service called Enron Online had been launched. Nevertheless, Enron was stopped when it finished all these changes. The reward system was not changed, for example, even when Enron was in trouble. It still paid millions of bonuses to its most successful trader in order to keep them in company (p9). Also, it kept top-down system to ignore and prohibit employees’ feedback. The culture of Enron kept as aggressive and none-question atmosphere. Overall, the Enron just stopped when planned change achieved which is called refreezing period. It did not follow ongoing method which keeps changing gradually and do not refreeze after finish the change plan. 1.3 Using the model for management change develop the change plan for Enron.
At Enron, they showed a one off intervention. Refer to question 2.1. During the change process, the refreezing [process should be aimed at reinforcing relationships and reducing barriers to communication flows rather than stressing formalization and hierarchical relationships.
- Results and feedback With change taking place, it results in a positive result in short period of time. Fortune magazine named Enron as the “”Most innovative company” 5 years in a row.(p2) Jeff Skilling’s ‘big idea’ led to Enron’s stunning growth. But an unhealthy new culture was experienced by the company, i.e. reward system caused a big potential problem for Enron. 1.4 Using the concept of “ Organizational fitness profiling ”, provide recommendations for how the change at Enron could have been changed to facilitate and improve the change process. Refer to reading pack Pg169. Develop a change program (combine with organizational fitness profiling)
- The target network, channel and audience are too generic-there is a need to consider the different audiences in the organization, and to target different networks using more channels are needed.
- The CEO needs to communicate with the senior managers of each function to communicate what exactly is involved in the different departments; these managers need to then communicate with their subordinates to explain the situation to them. Jayne may need to have meetings with the people most at risk from.
- Because the communication is too generic and the information is inadequate (i.e., the load is not sufficient), rumor is filling in the gaps and different individuals are encoding and decoding messages differently. There is a need for more feedback if rumour is to be combated and encoding/decoding distortions are to be reduced. This can be accomplished through smaller, face-to-face meetings within the different departments.
- the one-off meeting may be fine as a starting point because everyone gets to hear the message at the same time from the CEO directly. But it then needs to be followed up by separate communication by different people to different networks.
- The meaning of what it takes to be a good manager should changed from one who was macho, aggressive and punitive to one who was democratic and participative. Culture Enron (Culture) Definition of culture: Culture is a system of shared meaning within an organisation about the organisation its purpose, its members and how they should behave. These include values, philosophy and basic assumptions and beliefs that are shared by the members. Culture is a set of shared understanding. Terminal values are desired outcomes people try to attain. Instrumental values are desired modes of behaviour.
Approaches: Integrationist Differentiation Critical
- Make money, compete among themselves, no bad news is disclosed to the employees
- Top-down culture dissemination
- Selection of employees is gruelling
- Giving reward to A level performance appraisal group
- Giving punishment (shape up or ship out) to C level group: rank and yank
- Blind loyalty (they are expected to believe that Enron is at its best condition, and there is nothing wrong happening)
- questions/critics about the authority/illegal business practice are not allowed.
- Not allowed to express opinions
- Internal consensus: Common language among employees (eg. “come to shore”, “metrics”) Gary and Amy: Sceptical about the future of Enron Robert: and Jayne Enthusiastic about Enron’s future - Who benefits from the culture? The company, which has a high profit because making money is the employees’ goal, it ensures new corporate code’s rapid implementation - How easy is it to resist this culture? Hard to resist this culture because there are punishments (rank and yank) for not performing well. Also, there are punishment (reassigning, lose a bonus) for questions/critics done to the authority or illegal business practice, express opinion, bad news, communicate upward - What would happen if they did resist? They will be punished: rank and yank/reassigning, cut bonus - Why might people go along with this culture? Because by working hard, long hours, achieving goals, they will receive high compensations, cash bonuses and stock options, doubled salary Recommendations:
- Enron should allow the employees to voice out opinions and suggestions, as well as questions to be asked by the employees.
- It was an intensely competitive environment where employees “compete fiercely among
themselves” and leave all other loyalties, including family, behind.
Is the culture deliberate? (engineered culture)
- Culture was part of a deliberate strategy by Enron’s management. To create and sustain a
culture of high performance and competition, employees had to survive the tough
recruitment process and endure a punishing workload and intense work hours upon being
hired. Managers create the right type of culture via ‘engineering’ the right values through
strict recruitment process, selection, leadership, socialization and rewards and
punishment.
- ‘L & S were revered for their transformational leadership, it was their vision that had led
to Enron’s stunning growth.’ 246
Is the culture supported by consistent management practices?
- The strategy was explicitly supported by management practices via the reward and
punishment system implemented.
- Enron implements the “rank and yank” system whereby employees were ranked twice a
year and divided into three groups. Those in the bottom last group were given until the
next review to improve or face being fired.
- Enron’s prevailing employee reward philosophy states that employees deserve to “live
like last year’s Oscar winner” if they are “smart and tough enough” to work in Enron.
Thus, employees who met their targets were highly remunerated – 75 top performers and
their spouses were sent on a four all-expense day holiday trip. Even regular traders could
earn multi-million dollar bonuses.
- Not allowed to give feedbacks upwards.
Are people socialized into the culture?
- Employees were in a way forced to socialize into the existing culture or fear being
outcast or called ‘loser’.
- Blue shirt, goatee, and language.
Is the culture organization wide?
- It appears to be. Everyone is Enron looked similar and spoke the ‘same language’.
Does it benefit the organizational performance?
- It does help increase Enron’s productivity, profitability, tremendous increased in growth
as claimed by Enron in their 2000 annual report of tripled revenue figures since 1998.
Enron was also ranked number 24 among the 100 Best Companies to work for in
America by Fortune magazine, seventh largest company in the US and was once valued
over $US70 billion, reported $100 billion in revenues, share price exceeding $90 and
boost over 20 000 employees.
What else would make it an integrationist culture?
- There seems to be clear organizational boundary between what is outside and what is
inside. Human Resource management had to compete fiercely with investment banks and
other more established organizations to recruit the best talents. Within the organization or
‘inside’ employees compete fiercely among themselves.
- Top down control of culture by leaders. A strong culture of fear was embedded by top
level management onto employees were not encouraged to communicate upwards and
more so certainly not in the form of negative information.
- Nick names: Darth Vader and also Rebecca rode in an elephant in a major spectacles
Differentiationist
- New projects within Enron runs autonomously while developing their own infrastructure
and staffs from other parts of the company like the EnronOnline case where Skilling
didn’t even know about.
Critical
How employees are affected?
- Employees are afraid to voice their opinions, question unethical and potentially illegal
business practices because the ‘rank and yank’ system was both subjective and arbitrary
thus it was easy for managers to reward blind loyalty and quash brewing dissent.
Who benefits from the culture? Managers.
- Employees are willing to slog and work long hours and not question authority.
How easy is it to resist this culture?
Power and Politics
Enron – Power and Politics
Three Dimensions of Power: 1st: The first dimension of power revolves around the mobilization of resources to influence the outcome of decision- making processes and/or to get someone to do something they otherwise would not do (to defeat conflict) 2nd: The second dimension of power revolves around controlling the participants and agendas of decision making processes (inclusion, exclusion, changing terms of reference etc) [to sideline conflict] 3rd: The third dimension of power revolves around managing the meaning of desired outcome s (making them seem legitimate, beneficial, necessary, inevitable, rational, etc.) so that people accept them and conflict never arises over them. [to prevent conflict] Types of power used: Reward Power
- Enron’s management had the tangible power to reward or punish employees via their ‘rank or yank’ reward and punishment system. Rewarding those who ranked A and punishing those who ranked C. Examples:
- Top performers were offered huge cash bonuses and stock option grants and top 75 performers and their spouses were treated to an all expense paid four days vacation trip.
- they spend lots of money on reward, “ the company abolished seniority-based salaries in favor of more highly leveraged compensation that offered huge cash bonuses and stock grants to top performers” (p5)
- Performing employees earn astronomical salaries. “If you met your goals you could double your salary.”
- Poor performing employees were ‘yank’ or fired. Referent Power Enron has sidelined resistance by controlling the process to ensure decisions are made in the top management’s desired way. - The setting of meeting agenda exercised by top management - Criticism, feedback, and opinions are prohibited to which indirectly stops employees from questioning Enron’s performances and its higher level management’s crimes. (Would this overlap with Authority power?) - Enron also hire younger people “Because young people did not insist on coming in at none or leaving at five, or on keeping things as they had always been.” Young people also do not question authority. - Communications via email and general meeting were deliberately structured to ensure employees only receive certain information and prevent feedback from the other employees. - Employees did not retaliate or showed any form of resistance on the exhausting work load and hours as management has been ‘Enronizing’ them to compete fiercely and to put focus solely on the company. - Enron consistently sent out the message that the employees (known as Enronians) were the brightest and the best, lucky to recruited and now on an evangelion mission to transform Enron. (p5) - This legitimized the high work regimes in the minds of the employees as it seemed to be for the greater good of the society, hence was deemed necessary and acceptable. - Lay and Skilling had previously easily managed to ensure that employees do not question their decisions by deliberately ‘engineering’ and setting their stage-managed announcements to incorporate meanings into their presentations to ensure that the message received are easily perceived by employees as
- Employees had unquestionable faith in both Lay and Skilling as they were both described to be surrounded by faith and charisma as quoted by Sherman (2002) to be the ‘gate-crashing Elvis at an old country club dinner’. Examples:
- Jayne seemed to be magnetized by the referent power of Lay as she could not understand how people could ‘get things so wrong’ i.e. make their own speculations on the company’s condition even after Lay had make it clear during the stage- managed presentation that ‘the worst was now behind them’.
- "Lay was able to pitch it to his employees as a merger"
- "Enron employees had unquestioning faith in both leaders, who were surrounded by an aura of charisma” (p2) Authority Power
- Orders by the Chair and CEO (both Skilling and Lay) were never questioned or challenged as they were both deemed to have formal power within the hierarchy of Enron. Examples:
- Ensured that Enron would be located in Houston rather than Omaha, by gaining control of the board after using his power to handpick his executive (also overlapping the 2nd^ dimension of power)
- Employees are not encouraged to communicate upwards and are also discouraged from questioning authority.
- Overall employees were never included in upper level management decision making to ensure that higher level of decision-making was confined to ‘safe’ participants who would not expose and leak Enron’s fraudulent acts.
- Control of the arena (many issues that threaten power holders never make it to the decision arena)
- The culture of fear embedded prevents employees to pose questions and thus meetings were often adjourned without any inquiries.
- Lay handpicked his executives at the beginning of his Enron worklife who are mostly people that have previously worked with him.
- Lay was able to control the location of Enron by influencing the Board. legitimate and beneficial outcomes for them, the company and the society.
- Lay's presentation to explain the situation and convince that company is fine with attempt to produce a belief that company is fine.
- In Enron’s case, the company had an advertising campaign launching the concept of “what we believe” and also declare via Vision Team that “everything we do is change” to reduce the resistance of change. (p3)
