Change Management-Walker and Walker.

Barger, Bonita

CASE DESCRIPTION

Change Management-Walker and Walker (W & W) is designed to be used in a Human Resource Management and/or Organizational Behavior class at the senior undergraduate level or entry MBA level, and has a difficulty level of 4/5. The purpose of the case is three-fold:

* to increase student awareness of the issues involved in managing organizational change;

* to raise issues relating to organizational design, culture, and interpersonal alliances in managing human capital;

* to provide comprehensive teaching notes and citations for educators to enhance discussion.

CASE SYNOPSIS

This case provides a realistic scenario encountered by senior management in managing organizational change from the old to the new economy. Walker and Walker is a Southern family owned manufacturing firm struggling to expand into a global marketplace. The tensions involved in organizational change are played out in multiple arenas. The student is challenged to analyze these arenas. The instructor is provided with extensive supporting literature to facilitate this analysis.

INSTRUCTORS' NOTES

SUGGESTED CASE STRUCTURE AND QUESTIONS

The case presents extensive background for both the student and educator to understand the organizational issues and facilitate discussion. References, charts, and graphs enhance the teaching notes. These provide "ready notes" and access for educators to stimulate organizational analysis along the lines of organizational structure, human capital, alliances, and culture.

The following "ready notes" provide the instructor with a detailed analysis of the case by subject areas. Citations and literature link the theory and critical areas based on Configuration, Human Capital, Alliance Building, and Culture. In addition, charts, graphs, and websites are provided as additional reference and learning guides.

CONFIGURATION

1. What is the organizational design/structure of W & W?

Organizational design is "how organizations structure subunits and use coordination and control mechanisms to achieve their strategic goals" (Cullen, 2002, p. 639). The evolution of the traditional structure at W & W was driven by its core technology of ball bearings. It was an assembly line process, rigidly structured and specialized. It exemplified Mintzberg's machine bureaucracy (Bolman & Deal, 1991). The machine bureaucracy had a large support staff, technostructure, and operating core. It was vertical in its reporting structure and functional in its lines of expertise. Functional silos were rigidly established with years of controlled standard operating procedures and information in the hands of a few. Middle managers served the traditional function of passing information up the chain of command for approval and down the chain to inform (Mintzberg in Shafritz & Ott, 1992). Unlike Merton's Model, which states that organizations "reduce the amount of personalized relationships" (March & Simon in Shafritz & Ott, 1992) in order to increase reliable behavior, W & W used personal family relationships to control. Functional personalized relationships were the key to controlling and ensuring consistent, reliable behavior. For example, engineering managers hired college graduated from only their alma mater. Family members and friends of current engineering staff were hired. No "outsiders" were hired. Control of like types, who were likely to follow the rules, was ensured up front.

Rules in the form of standard operating procedures were well published, and decision-making was held by a few (Marsh & Simon in Shafritz & Ott, 1992). Functional leaders were the brains, while functional followers were the arms and legs. Everyone knew their role and their responsibilities. If problems arose, a typical response to organizational diagnosis was "That's not my job" or "That's Engineering's [Marketing's, Production's, etc.] fault." The blaming of people or functional areas was the preferred choice and habit for sorting out what was happening structurally at W & W (Bolman & Deal, 1991). A picture that Taylor would have presented in 1916 was being enacted in 1991 (Taylor in Shafrtiz & Ott, 1992).

Upon Roger's appearance at W & W, rules, roles, and responsibilities were clear. If there was not a standard operating procedure, then one was written, or it was "understood by all that this is how it was done."

External environmental changes in competition, customer demands, and globalization created pressure on the internal structure. The structure could not accommodate the rapid change in technology and need for information. The machine structure was too cumbersome to provide information quickly. Standard operating procedures were dated and needed to be flexible (unstandardized-standarization). As soon as they were written, they needed to be changed or updated. The structure of the organization needed to be changed. A structural reorganization was put into place. The machine bureaucracy was being restructured into business units. The functional silos were being challenged and dismantled. Attempts were made through the implementation of business unit teams to create quasi-autonomous units (Bolman & Deal, 1991).The rules had changed.

Everyone's role was changing. There were no written manuals or operating procedures for the new roles. Roger's role as president was shifting from a traditional paternal benevolent father figure to one of strategic visionary who connects with external customers and the board of directors, and identifies new business ventures (Mintzberg in Shafrtiz & Ott, 1992). Functional leaders were expected to empower their people, be a catalyst for change by bringing in new technology, facilitating all channel communication cross functionally and supporting lateral coordination (Bolman & Deal, 1991). Middle managers were not being replaced when they retired or relocated. Several middle managers were asked to take training courses to increase their areas of specialized knowledge. The message was being delivered--through newsletters, career development meetings, and the cultural change training--that managers were expected to have two or more areas of specialization. The company was moving from functional silos supported by specialists to business units supported by business generalists. Information and technology complexities required business generalist skills, knowledge, and attitudes at the top and middles of the organization--quite the opposite dynamic proposed by Gulick in 1937, calling for more specialization based on "the range of knowledge and skill is so great that man cannot within his life-span know more than a small fraction of it" (Gulick in Shafrtiz & Ott, 1992, p. 87).

Core operators were significantly impacted by the structural changes. Authority was shifting. The traditional vertical triangle was being turned upside down. Authority once held by top and middle managers was expected to be demonstrated at the core operator level. Core operator responsibilities and decision-making were increased. Computers were being installed. Operators were required to implement quality improvement data tracking on their work processes. Entering data into computers, providing reports, and attending team meetings were now a part of their daily routine. Anxiety was heightened. Illiteracy was high at W & W. Several core operators were exposed and refused to attend training classes. Several core operators took early retirement.

Organizations exist to accomplish goals. Structures, coordination, and control ensure that the job gets done (Bolman & Deal, 1991). The goals were in transition at W & W. The traditional family business goals of "make money, but it's more important to have harmony" were shifting to global business goals of "make money, do whatever it takes, while maintaining ethical behavior." Structure, coordination, and control were shifting slowly to accomplish new goals.

SUGGESTED WEBSITE RESOURCES:

Information on Organizations http://www.hoovers.com/

Economist http://www.economist.com

Bureau of Labor Statistics http://stats.bls.gov

U.S.Department of Labor http://www.dol.gov

HUMAN CAPITAL

2. Organizations compete through their people. How did W and W manage Human Capital in the past? How were they preparing to transform Human Capital Management for the future?

W & W had a history of caring for employee needs. Basic human needs were met with an above-average hourly and salaried benefit package. Safety and security needs were met as a history of entitlement and was rooted in job security. W & W existed to serve the family of employee needs for affiliation, belonging, and knowledge (Maslow in Shafritz & Ott, 1992). Training and information courses were offered for employees and their family members. Employees attended training on company time. Community education programs that extended beyond work-related topics were offered at the work site. GED classes were offered during working hours in the back of the manufacturing plant. Employee needs were accommodated whenever possible. Employees and their family members were well cared for and cared about W & W.

One resounding individual need that did not fit the current changes at W & W was that of the need for familiarity. Familiarity and redundancy in work and relationships was a way of life. This need was expressed by statements of "We have done it this way all these years, and it has worked--Why change now?" "Just leave me alone!" "Live and let live." "Just wait it out--The new people will be gone." Situations that entailed change and involved ambiguity and uncertainty were to be avoided. The need for permanence, stability of task/job and relationships was a basic human need for many W & W employees.

Family relationships in the workplace and common church affiliations not only served as a control mechanism but fulfilled employee needs for love, affiliation, and inclusion, or, as McGregor calls it, the Human Side of Enterprise (McGregor in Shafritz & Ott, 1992, p. 174).Human resource practices and policies were designed to support employee needs. The language of the policies is telling. For example, employees were not terminated. They were separated or divorced from W & W. Employee needs were strongly taken into account supported by structural and cultural elements.

This policy and language created an enmeshed system of need fulfillment and employee dependence on the company. W & W was an additive organization. A co-dependent enmeshed system had been established from years of parent-child behavioral patterns. Employees were rewarded for loyalty, following the functional heads, and doing what they were told. The reward was job security today and a peaceful retirement tomorrow. W & W was fulfilling current and future needs while suppressing autonomy, independent thinking, and self-reliance.

Initially, the people environment at W & W was warm and friendly. Everyone knew each other and, even though they may not have liked each other, they "got along." Under Roger and Richard's direction, newcomers were brought into the organization to build human capital. "Human capital is intangible and elusive and cannot be managed the way organizations manage jobs, products, and technologies" (Bohlander, et al, p.14). The newcomers were different. Their differences were obvious in language, voice, style, physical appearance, work habits, and management style. Although there was not a critical mass of newcomers, there was a sufficient number distributed throughout the company to send the message that things were changing. The mix was changing.

This was rubbing up against the need for familiarity and stability. W& W was experiencing ambiguity and becoming "unhealthy." "One of the signs of a healthy organization is the ability to effectively orient new members and readily slough off those who cannot be adapted to the established outlook" (Selznik in Shafritz & Ott, 1992, p. 118). W & W was orienting their newcomers but was unable to bring others on board.

For some individuals and groups, the changing structure created a "mis-fit" between individual and organizational needs. Individuals such as Jake and his followers were losing control (i.e., access to information), rewards and recognition (i.e., promotions) and familiar work. Their needs for affiliation, inclusion, control, and achievement were not being met. Unfulfilled needs can led to physical and psychological withdrawal, sabotage, moving up, or unions.

From Jake's perspective, he must have felt that he was being treated unfairly. He had given years of his life to W & W. W & W's success was his success. His contributions were not being recognized and valued. He was experiencing stress and did not have the familiar support system that W & W traditionally provided to deal with this stress.

SUGGESTED WEBSITE RESOURCES:

Society for Human Resource Management http://www.shrm.org/

HR Magazine http://www.shrm.org/hrmagazine/

Equal Employment Opportunity http://www.eeoc.gov

American Society for Training & Development http://www.astd.org/

ALLIANCES

3. Identify relevant relationships/ coalitions/networks at work here? Identify who might resist what? Why?

"If organizational power can 'ennoble,' then recent research shows organizational powerlessness can ... 'corrupt.'" (Kanter in Shafrtiz & Ott, 1992, p. 449)

With the change of structure, rules, and vision at W & W, Jake was experiencing a sense of powerlessness over his future. Although conditions had changed, he and his following chose to "stay and fight, which gives power to their voice" (Voice is here defined as "any attempt at all to change, rather than escape from, an objectionable state of affairs ..." Hirschman in Schafritz & Ott, p. 473). Jake's position on the management staff, which required little work, and his political skillfulness in dealing with unions provided the conditions for exercising power. Jake held positional, knowledge, and resource power. He had the time and will to expend energy and to exercise power.

Coalitions at W & W formed around people, not ideas. W & W employees were followers, not leaders. Even if people were not totally aligned with a position, they followed their leader. Loyalty was valued at W & W. Jake knew this and used it well. He exercised and structured his power base through the use of internal and external coalitions. Internal coalitions consisted of employees whom Jake had hired and family members. Members of this coalition had a vested interest in maintaining the status quo. They enjoyed job security and were not interested in moving outside of Macon. External coalitions were comprised of a network of churches in the community. Employees from W & W held key positions in these churches. They could easily influence community thinking, especially with negative information about New Age philosophy in the religious media. For years, both of these groups were perceived as "insiders" by newcomers to Macon. They held the reins of information, decision making, and resources for W & W and the community.

The stated agendas for both coalitions were the "elimination of New Age philosophy" in the community and workplace. The undiscussable agenda for Jake and his internal coalition was the preservation of their power base and positions. There was a resource scarcity (Bolman & Deal, 1991). Upper and middle management positions were limited in Macon. Movement into new work and locations were unacceptable.

Roger and Richard had set the new direction. They were not going to change. Jake had solidified the coalitions. They were not going to change. Jo Anna and senior management had created and believed in the training and succession planning process. They were not going to change. All parties had "placed their stakes in the ground." New data or differing points of view were not going to alter their positions. Organizational politics were at work (Pfeffer in Shafritz & Ott, 1992). An impasse existed.

The result was a long overt and covert protracted battle. Jake was granted time in his current position, which allowed him to fuel the battle. Core workers and employees lower down in the organization were cut off from company information, as Jake ceased to hold staff meetings. The main source of information was the rumor mill, which consisted of "the evils of New Age practices."

Like the black hole in space that captures everything that travels in its vicinity, various levels of management withhold or distort information so that it doesn't get to the rest of the organization. Without proper information dissemination, change will fail" (Connor, 1993, p. 117).

Withheld and distorted information not only delayed change, it impacted production. Quality issues began to occur in the product. Reject rates increased. Core workers wielded considerable power and influence (Mechanic in Shafrtiz & Ott, 1992). Their influence was being felt in the bottom line, as profits began to erode in Jake's facility.

Religious prayer sessions were being conducted on company time and property. Religious communities were holding prayer sessions in the community. Roger, Richard, and a segment of his staff continued with succession planning and vision implementation for W & W. Energies that could have and should have been directed into productive work were wasted. Profits were falling. Individuals and groups became targets of slander.

SUGGESTED WEBSITE RESOURCES:

Center for the Study of Teams http://www.workteams.unt.edu

Information on Organizations http://www.hoovers.com/

CNBC/Dow Jones www.cnbcdowjones.com

ORGANIZATIONAL CULTURE

4. What is the organizational culture of W and W? Confronted with fear, change, and ambiguity, individuals create symbols to provide security and the "known". What symbols, events, rituals were emerging here? Discuss the advantages and risks associated with these?

"The concept of "organizational culture" is widely discussed in management circles but is frequently not well defined. Organizational culture can be defined as the fabric of values, beliefs, assumptions, myths, norms, goals, and visions that are widely shared in the organization." (French, 2003, p. 94) "Organizational culture is especially relevant to gaining\an understanding of the mysterious and seemingly irrational things that go on in human systems. And culture must be understood if one is to get along at all, as tourists in foreign lands and new employees in organizations often discover to their dismay." (Schein in Shafrtiz & Ott, 1992, p. 491)

Change was foreign to W & W. The process of change created ambiguity, uncertainty, and confusion. "Faced with uncertainty and ambiguity, human beings create symbols to resolve confusion, increase predictability, and provide direction" (Bolman & Deal, 1991, p. 244).

Symbols are intended to resolve confusion. When diametrically opposed symbols are created simultaneously, the outcome is one of greater confusion and ambiguity. In order to resolve this ambiguity, individuals must make a choice between conflicting symbols. Individuals generally choose the symbol that most resembles their existing paradigm.

Symbols were used to mediate, influence, and sustain the coalitions that had been formed at W & W. The following chart can be used to highlight events and conflicting symbols that created meaning. The symbols could reinforce the members of each coalition in their beliefs and provide a choice and position for outsiders. Symbols are intended to create clarity. They succeeded here in doing so, while coalescing and fortifying opposing positions.

SUGGESTED WEBSITE RESOURCES:

Academy of Management Journal http://www.aom.pace.edu/

Fast Company http://www.fastcompany.com/homepage/

EPILOGUE

This case is a composite of multiple individuals experience over time. Names and other features have been changed. No reference to any specific company or individual is intended or should be inferred.

SUPPORTING MATERIALS

Charts #1 and #2 are provided to aid the instructor in comparing the multiple forces at work in the case. They can be reproduced into transparencies or given as handouts to facilitate discussion.

REFERENCES

Bohlander, G., Snell, S. & Sherman, A. (2001). Managing Human Resources (12ed). South-Western College Publishing.

Bolman, L. G. & Deal, T. E. (1991). Reframing organizations: Artistry, choice, and leadership. San Francisco, CA: Jossey-Bass Publishers.

Connor, D. R. (1993). Managing at the speed of change. New York: Villard Books.

Cullen, J. B. 2002). Multinational Management. A Strategic Approach (2ed.) South-Western College Publishing.

French, W. L. (2003). Human Resource Management. Boston, MA, Houghton Mifflin Company.

Marquardt, M., & Reynolds, A. (1994). Global learning organization. New York: Irwin.

Shafritz, J. M. & Ott, J. S. (1992). Classics of organization theory. Belmont, CA: Wadsworth Publishing Company.

Bonita Barger, Tennessee Technological University

SUGGESTED CASE QUESTIONS:

Configuration. What is the organizational structure/configuration?

Human Capital. Organizations compete through their people. How did
 W and W manage Human Capital in the past? How were
 they preparing to transform Human Capital
 Management for the future?

Alliances. Identify relevant relationships/ coalitions/networks
 at work here? Identify who might resist what? Why?

Culture. What is the organizational culture of W and W?
 Confronted with fear, change and ambiguity,
 individuals create symbols to provide security and
 the "known". What symbols, events, rituals emerged
 here? Discuss the advantages and risks associated
 with these?

Chart I

Events and Rituals Symbolic Representations

Group meetings Prayer sessions Training sessions

Cultural change New Age, Evil. Vision. Futuristic
training Prayer groups were a focus with charts
 visual sign of posted on walls
 separation.

Training in ethics Training materials in Ethical statements
 ethics crumbled and posted on the walls
 placed in public view

Valuing diversity New Age education was Showing differences
training created through the between functional
 showing of video tapes areas and individuals
 and literature through preference
 indicators and group
 discussions.

Chart 2

Current Culture Definitions

Technology--"Me,Too" copying Artifacts and creations are the
of past ballbearing visible level of W & W. They
manufacturing processes construct the physical and social
(Manu)facturing means by environment in which employees
hands. work.

Language--Generalized
stereotyping of people, processes
and events intermingled with
sarcastic humor. Few words were
spoken, as short sentences had
meaning for those involved in the
history of the company.

Humor was "truth telling"
without having to deal with or
discuss the issue. It was a form
of play.

Sarcasm was pointed and value
laden. The spoken language was
rich in symbols
and meaning.

Physical environment consisted
of gray and green floors and walls
with a backdrop of machines

Values were spoken and Values--"In a sense, all cultural
understood. They were not learning reflects someone's
written down. Several of the original values, their sense of
value statements that formed W what 'ought' to be, as distinct
& W's foundation were: from what is ...

* We are family. When a group faces a new task,
 issue, or problem, the first
* We stick together and solution proposed to deal with it
take care of our own. can only have the status of a
 value, because there is not yet
* We draw strength from a shared value
our families, community, for determining what is factual
and religion. and real (Schein in Shafritz &
 Ott, 1992, p. 497).

Jake and his following held these
values very dear, as they formed
the roots of their lives

Heroes were founding fathers,
James T. and John Walker. They
held the values stated above.

Basic assumptions were: Basic assumptions have "become
 so taken for granted that one
We are family. You are loyal to finds little variation within a
the family, and the family is cultural unit ...
loyal to you. Until death do us
part." Members would find behavior
 based on any other premise
 inconceivable" Schein in Shafritz
As long as I do my job, do what & Ott, 1992, p. 499).
I am told, I will be taken care
of, move up the organization, and
retire well. I am entitled to
future job security.

Current Culture Emerging Culture

Technology--"Me,Too" copying Technology was intended to
of past ballbearing differentiate W & W in the
manufacturing processes marketplace. W & W wanted to be
(Manu)facturing means by the leader, not "Me, Too"
hands. follower in the manufacturing
 and mentofacturing.
 (Mento)facturing means mind.

Language--Generalized Language was changing from
stereotyping of people, processes southern regional dialects to
and events intermingled with global business language. Language
sarcastic humor. Few words were classes in Spanish, French, and
spoken, as short sentences had Korean were offered to employees
meaning for those involved in the to support the global expansion.
history of the company. Business writing and presentation
 classes became part of management
Humor was "truth telling" training. Due to sexual harassment
without having to deal with or focus, and a more formalized
discuss the issue. It was a form business culture, jokes and overt
of play. humor were not tolerated. A formal
 business culture was being shaped
Sarcasm was pointed and value by a formal business language.
laden. The spoken language was Play occurred in the evening over
rich in symbols business dinners.
and meaning.

Physical environment consisted A new corporate office was
of gray and green floors and walls established outside of the
with a backdrop of machines manufacturing environment. Modern
 art, plush appointments, and
 furnishings created a global
 corporate environment.

Values were spoken and New stated emerging cultural
understood. They were not values were written in value
written down. Several of the statements and posted on the walls
value statements that formed W in all locations. The following
 are excerpts:

& W's foundation were: * We live in a global
* We are family. community.
* We stick together and
take care of our own. * We value all people.
* We draw strength from
our families, community, * We value our employees, as
and religion. they are sources of our
 creativity.

 * We value our suppliers, as
Jake and his following held these they are the source of our
values very dear, as they formed parts
the roots of their lives
 * We value our customers, as
 they are the source of our
 livelihood.

 * We value our competitors,
 as they are inspiration for
 our creativity.

 * We value the global
 communities in which we
 live and work.

Heroes were founding fathers, Heroes were the founding fathers.
James T. and John Walker. They Roger was the champion who hadnot
held the values stated above. yet reached hero status. He held
 the values stated above, which had
 not yet been institutionalized as
 part of the culture. No heroines
 were visible.

Basic assumptions were: Emerging assumptions:
 Change is inevitable. We must be
We are family. You are loyal to ready and skilled at changing.
the family, and the family is Thus, we must practice changing.
loyal to you. Until death do us Those who are unable or unwilling
part." to change will be left behind.

As long as I do my job, do what
I am told, I will be taken care We are a community in which
of, move up the organization, and people enter and leave. It is
retire well. I am entitled to normal and natural.
future job security.