Con or construction?: The case of NYE contracting.(Instructor's Note)

Sigmar, Lucia S.

CASE DESCRIPTION

The primary subject matter for this case concerns the development of a communications strategy for a scenario where expectations have diverged between a contractor and a client concerning prior verbal and written agreements. Secondary issues include the ethical obligations of contractors to their clients, contractor expertise in bidding jobs, and effective communication between the contractor and the client. This case was designed for use in an undergraduate business communications course, but can also be easily adapted for use in an undergraduate business law or business ethics course. It could be taught in a 1 1/2-hour session and is expected to require 2 hours of outside preparation by students.

CASE SYNOPSIS

Alex and Lauren Stewart, new to the Houston area, retained the services of a general contractor to make repairs to the home that they had just bought. Although they took great care in researching and hiring Nye Contracting, they encountered problems from the start with the contractor, his various crews, interruptions and delays in the work schedule, and poor quality work. The last straw for the Stewarts was Nye's demand for additional money for materials to complete the job. He also threatened to place a lien on the Stewart's home until the additional money requirement was met. At this point, the Stewarts feel compelled to document their refusal to pay additional money to Nye and to hold Nye to the terms of their initial agreement, to clarify their position to his demands, to document the extent (percentage) of the work accomplished to date in order to calculate what percentage of the agreed-upon wages should be paid to date, to specify what jobs still need to be done, and to document the deterioration of their business relationship with Nye for possible legal action. Alternatively, however, the Stewarts are considering milder communication in the hopes of convincing Nye to complete the job he agreed to perform initially and to maintain goodwill.

INSTRUCTOR'S NOTES

We use this case in conjunction with Lesikar, Flatley, and Rentz's Business Communications (11th edition) after classroom coverage of bad news and persuasive messages. This case enhances student understanding of the effective writing strategies in composing a complex message that is thorough and tactful, yet clear and concise. Ideally, it must also maintain goodwill between the parties involved. Writing strategies may involve using the indirect or direct approaches in writing bad news messages and the use of rational and/or emotional appeals to persuade. This case lends itself well to the strategic considerations involved in mild, moderate, and strong versions of bad news messages, either on the part of the contractor or on the part of the client. A series of escalating letters can be written either individually or collaboratively. Role-playing is also effective in practicing verbal and non-verbal communications skills in relaying bad-news.

DISCUSSION QUESTIONS

1. Based on inferences drawn from this case study, comment on Nye's communications style with his sub-contractors (i.e. work crews) and with his clients. What role does his confidence play in his relationship with the Stewarts and how does this affect his communication with them?

2. Consider the elements of the relationship between Nye and the Stewarts and Nye and his subcontractors. How does this "relatedness" determine the effectiveness of communication between all parties?

3. What are some of the possible causes of Nye's communication problems? Of the Stewart's?

4. What assumptions on the Stewart's part may have caused communications problems?

5. At the end of the first week, Lauren resolves to "discuss" the unsatisfactory situation with Nye. What specific goals should her communication plan address?

6. What responsibilities pass to the Stewarts in the absence of Nye? Specifically, should Lauren have attempted to communicate directly with the sub-contractors? What were the possible causes of her communication problems with the work crews?

7. What actions would you recommend to either Nye or the Stewarts to assure that this does not happen again?

8. What should Nye and the Stewarts do to resolve the communications deadlock?

9. What are some long-term repercussions of the various communication problems for Nye Contracting?

10. How could Lauren have handled her verbal response to Nye's demand for more money better? What were her alternatives?

11. How could Nye have handled his verbal request to Lauren for more money better? What impact may his other jobs have had on the Stewart's job?

12. Was Nye ethical in demanding more money of the Stewarts after submitting his bid for the job and receiving the work? What choices could he have offered?

13. Play the role of communications consultant to Nye Contracting. Make recommendations to help Nye stay in touch with his clients and workers. Explain your recommendations.

14. The Stewart's letter to Nye is complex in that it needs to be thorough and tactful, yet clear. Ideally, it must also maintain goodwill between the parties involved, and both the Stewarts and Nye have an interest in seeing the job done and done well. Specify the reasons why both parties would desire a positive outcome (where they work together to accomplish the goal) as opposed to legal action (where they are forced to resolve the issue). What writing strategy accomplishes the former? What writing strategy accomplishes the latter?

POSSIBLE RESPONSES

1. During the bidding phase of the job, Nye makes himself readily available and responsive to the Stewarts. He is willing to perform work that he may not have been entirely comfortable or experienced in doing. But after winning the bid and collecting the materials draw, Nye turns his attention to other jobs. Although he responds effectively to Lauren's complaint on the second day, he is not consistent in doing what he says he will do which, in turn, causes additional problems the remainder of week one and during week two with his subcontractors and the client. By the third week, Nye's communications style has changed from accommodating to defensive and demanding.

Nye's decreasing confidence in his workers and the job parallel his decrease in communication with the Stewarts. Avoiding communication is as destructive as negative communication.

2. This question concerns the importance of building "relatedness" with other individuals. Some students may maintain that the key relationship in this case is between Nye and the Stewarts. The communications problem, however, may actually be rooted in the "relatedness" between Nye and his subcontractors. Who are the workers to Nye? Who is Nye to the workers? The answers to these questions hinge on how connected Nye is with his workers and how connected they are to him. Nye may view his subcontractors as nameless, faceless, common laborers; and his workers may view Nye as simply exploiting them. This lack of "relatedness" will directly affect the amount of pride and motivation that they have in their work and the dedication that they have to Nye. On the other hand, Nye could respect and appreciate his workers as skilled and dedicated craftsmen.

This "relatedness," grounded in a more human dimension, will likely have a positive effect on the workers' productivity and attitudes towards Nye, and by extension, the Stewarts.

Initially, the Stewarts are satisfied that their diligent and conscientious search has resulted in a qualified, highly-recommended contractor to perform the work on their house. Nye can increase that confidence by building his "relatedness" to the Stewarts (and his work crews), by thinking about who they really are and tailoring his communication skills to meet their individual needs. In this situation, Nye appears rather to erode the relationship by failing to relate to his clients or his workers. Students may then question whether or not Nye's references were even real or just wrong, and whether or not Nye was simply caught in a series of circumstances beyond his control.

3. Nye may have had too many jobs going on simultaneously and may have been simply too distracted, frustrated, or overwhelmed to perform any of them well--much less to communicate to his customers about them. He may have had problems hiring, training, and retaining reliable and experienced subcontractors. He may have had difficulty communicating with the subcontractors, the majority of whom are non-native speakers of English. He may have had problems being held accountable for problems that he viewed as beyond his control. He may also have had gender-related communication problems. The Stewarts, on the other hand, may have been micro-managing the jobs causing higher expectations on their part, and causing them to become directly involved in the communication and supervision of the Nye and his work crews.

4. The Stewarts may have assumed that Nye was more competent or more reliable than he actually was based upon the recommendations from those on his references list, and perhaps from their own naivety in working with trades. The positive recommendations from others may have raised the level of their performance expectations in terms of quality and efficiency. They may have also relied too heavily on the written scope and timeline without considering other contingencies like bonds for completion or possible guarantees.

5. Students can focus on a positive (rather than negative) problem/solution approach, in writing or documenting their concerns about the work. Here, direct or indirect order, word choice, clear and concise communication, and maintaining goodwill are key considerations. Role-playing is also effective in practicing verbal and non-verbal communications skills in relaying this information (bad-news) to Nye.

6. Students can debate the issue of whether or not Lauren should have attempted to communicate with the work crews. Some may argue that she had no choice given the fact that Nye was not present. Others may argue that she was not the supervisor in the first place. Or some may argue that, as the client, she was actually the head supervisor whom everybody had to please, even Nye. Lauren's communication problems were language-and culture-based. She was also not their direct supervisor which may have affected their ability to listen to, rather than simply hear, her directives.

7. Answers should focus on constructive ways to improve communications between contractor and client, such as a daily progress report from contractor to client with prompt follow-up to problems or concerns voiced by the client at the end of each day.

8. Students should consider both verbal and non-verbal ways of initiating and promoting an atmosphere in which discussion can begin. Role-playing is an excellent means of inspiring discussion with emphasis on positive words, timing, respect, and tactfulness.

9. Long-term repercussions for Nye Contracting may include loss of credibility in the industry, loss of customers and/or business. Students could also discuss how standards for client relationships, or standard costs, or a plan to disentangle the parties in the event of a disagreement, could assist contractors and clients (or complicate the issues) in dealing with similar problems.

10. Lauren could have suspended her judgment a bit longer and allowed Nye to elaborate more specifically. Some students may argue that she should have been more assertive sooner.

11. Nye could have been a little less abrupt with his demands and less aggressive in his body language. He could have provided Lauren with receipts for the materials versus his estimate, and an apology for his miscalculations. He could have explained other variables like cash problems, personnel issues and the like. He could have provided Lauren with a specific plan to finish the job.

12. Students can debate the issue of whether or not Nye was ethically justified in demanding more money of the Stewarts to complete the work. Some may argue that an agreement is an agreement. Others may argue that Nye's circumstances left him little choice: his previous jobs may have left him strapped for cash, or his workers may have been unreliable.

13. Recommendations should be based on the principles of effective non-verbal, verbal, and written communication.

14. Some of the more practical considerations will involve saving legal fees and engendering bad relations. Writing strategies may involve using the indirect or direct approaches in writing bad news messages. This case lends itself well to the strategic considerations involved in mild, moderate, and strong versions of bad news messages, either on the part of Mr. Nye or on the part of the Stewarts. This series of escalating letters can be written either individually or collaboratively.

EPILOGUE

Nye's behavior had caused the Stewarts to lose confidence in his ability to perform effectively in accordance with their agreement. They decided to find another contractor to complete, and in some cases, correct the work that Nye had done. But to be fair to Nye, they agreed to pay him for the work he had completed since the project start date. To calculate the percentage of the total job completed, the Stewarts reviewed the original scope of the project, and compared it to those parts of the project Nye had completed. That percentage of the original bid, less the 50% materials draw the Stewarts had already paid, was paid in full to Nye by check, and the job was terminated in writing by the Stewarts and Nye.