CASE # 1
ABC COMPANY
The ABC Company comprises seven units, each of which has been managed autonomously over the last five years. Each unit is managed by a General Manager and comprises one or more product/service departments and other staff departments. Each unit is, in effect, an autonomous division of ABC. The chief executive has managed the company from a small headquarters building using a participative style. He has become increasingly concerned about the performance of one of the seven units. The unit employs 700 people and accounts for 20% of ABC's activities. He perceives the external and internal pressures on this unit (external pressures include increasing client dissatisfaction, new technology, increasing competition and rapidly increasing costs and internal pressures include fear of change, limited management skills in the introduction of change, lack of experience with new technology, low productivity and quality, and poor staff morale) and believes that the general manager responsible for it cannot deal with the problem. The chief executive has been unable to devote much time to this unit during the last years because of other pressures on his time. During the last four years, he has achieved significant changes and improvements in other units within the company. This has absorbed much of his time but has created a very positive reputation for him throughout ABC Company. He is seen as up-to-date and concerned for his employees. The general manager has worked with ABC for 18 years now. His approach to managing the unit has been always to control costs and activities fairly tightly and to concentrative on developing an efficient and professional team working for him. He has paid little or no attention to the needs of clients. There have been a growing number of complaints from clients about the service provided by the unit. Long waits are often involved and staff are said not handle clients too well. The new computer technology has being deployed by ABC. However, progress in this unit has been slow. The general manager seems largely disinterested and the staff reluctant to adapt. However, the pressure to introduce the technology is strong. Staff costs are high and many routine tasks seem likely to be capable of computerization. The chief executive wishes to introduce marketing and quality audit ideas into the unit as a means of responding to some of the pressures identified above. Moreover, he believes that new technology must be introduced over the next few years, particularly in the product/service departments. To do so he has concluded that three major problems must be faced, as follows: attitudes to change and the organization must be changed; knowledge of new technology must be improved dramatically; and the organization structure must be reviewed in order to introduce marketing and quality audit ideas into the unit.