Alpha University college
Organizational Behavior Case Study
Case one: How a UPS Manager Cut Turnover
In 2002, Katriona Roeder was promoted to district manager for UPS’s operation
in Buffalo, New York. She was responsible for $225 million in revenue, 2300
employees, and the processing of some 45 000 packages an hour. When she took
over in Buffalo, she faced a serious problem: turnover was out of control. Part-time
employees—who load, unload, and sort packages, and who account for half of
Buffalo’s workforce—were leaving at the rate of 50 percent a year. Cutting this
turnover rate became her highest priority.
The entire UPS organization relies heavily on part-time employees. In fact, it has
historically been the primary inroad to becoming a full-time employee. Most of
UPS’s current executives, for instance, began as part-timers while attending
college or university, then moved into full-time positions. In addition, UPS has
always treated its part-timers well. They are given high pay, flexible work hours,
full benefits, and substantial financial aid to go back to school. Yet these pluses did
not seem to be enough to keep employees at UPS in Buffalo.
Roeder developed a comprehensive plan to reduce turnover. It focused on
improving hiring, communication, the workplace, and supervisory training.
Roeder began by modifying the hiring process to screen out people who essentially
wanted full-time jobs. She reasoned that unfulfilled expectations were frustrating
the hires whose preferences were for full-time work. Given that it typically took
new part-timers six years to work up to a full- time job, it made sense to try to
identify people who actually preferred part-time work.
Next, Roeder analyzed the large database of information that UPS had on her
district’s employees. The data led her to the conclusion that she had five distinct
groups working for her—differentiated by ages and stages in their careers. In
addition, these groups had different needs and interests. In response, Roeder
modified the communication style and motivation techniques she used with each
employee to reflect the group to which he or she belonged. For instance, Roeder
found that college students are most interested in building skills that they can
apply later in their careers. As long as these employees saw that they were
learning new skills, they were content to keep working at UPS. So Roeder began
offering them Saturday classes for computer-skill development and career-
planning discussions.
Many new UPS employees in Buffalo were intimidated by the huge warehouse in
which they had to work. To lessen that intimidation, Roeder improved lighting
throughout the building and upgraded break rooms to make them more user-
friendly. To further help new employees adjust, she turned some of her best shift
supervisors into trainers who provided specific guidance during new hires’ first
week. She also installed more personal computers on the floor, which gave new
employees easier access to training materials and human-resource information on
UPS’s internal network.
Finally, Roeder expanded training so supervisors had the skills to handle increased
empowerment. Recognizing that her supervisors—most of whom were part-timers
them- selves—were the ones best equipped to understand the needs of part-time
employees, supervisors learned how to assess difficult management situations, how
to communicate in different ways, and how to identify the needs of different
people. Supervisors learned to demonstrate interest in their employees as
individuals. For instance, they were taught to inquire about employees’ hobbies,
where they went to school, and the like.
By 2006, Roeder’s program was showing impressive results. Her district’s attrition
rate had dropped from 50 percent to 6 percent. During the first quarter of 2006,
not one part-timer left a night shift. Annual savings attributed to reduced turnover,
based largely on lower hiring costs, are estimated to be around $1 million.
Additional benefits that the Buffalo district has gained from a more stable
workforce include a 20 percent reduction in lost workdays due to work-related
injuries and a drop from 4 per- cent to 1 percent in packages delivered on the
wrong day or at the wrong time.
Questions
1. In dollars-and-cents’ terms, why did Katriona Roeder want to reduce turnover?
2. What are the implications from this case for motivating part-time employees?
3. What are the implications from this case for managing in future years when
there may be a severe labour shortage?
4. Is it unethical to teach supervisors “to demonstrate interest in their employees
as individuals”? Explain.
5. What facts in this case support the argument that OB should be approached
from a contingency perspective?
Case Two: NovaScotian Crystal
Do opposites attract? Meet Denis Ryan and Rod McCulloch—partners in
NovaScotian Crystal, a small company situated on the quaint waterfront of Halifax.
NovaScotian Crystal makes fine crystal the traditional, old-fashioned, expensive
way, with trained craftspeople. It is the only company in Canada that produces
mouth-blown, hand-cut crystal.
Ryan started the company in the late 1990s on an impulse. He had already had
successful careers in the entertainment and the financial services sectors. With a
vision, intrigue, creativity, an impulsive nature, and a contagious enthusiasm for
making crystal the traditional way, Ryan set up his glassworks. He even convinced
craftspeople to come from Ireland to work for him.
After a few years of making crystal, but not many sales, Ryan found himself facing
a serious financial crisis and possible bankruptcy. He needed someone who could
focus on the financial side of the business. On another impulse, Ryan hired Rod
McCulloch and a new partnership was born. Ryan took on the role of chair,
figurehead, and liaison, while McCulloch became president.
McCulloch—a details, numbers, cost-conscious, organized kind of guy—looked for
ways to turn the company around. Using his years of experience as an accountant,
he thought about how to manage the company better, make it more efficient, and
iron out production. He then began searching for more ways to cut costs and
increase sales.
With each taking on different roles, Ryan and McCulloch worked well together.
While McCulloch presented tough cost-cutting measures, Ryan brought impulsive
ideas about new markets and, often, much-needed personal and emotional support.
Even in the face of continuous failures and disappointments, the team never gave
up. Out on the water- front, over a mug of tea, Ryan could often be found giving
McCulloch encouragement, a moment of peace, inspiration, and yet more creative,
impulsive ideas for meeting their challenges. Take, for instance, how Ryan
encouraged McCulloch to call investors for more money, or the suggestion to
market their product to a high-end retail store in Toronto.
At long last, after a spring trade show, creative selling strategies, an expanded
product line, and a Christmas craft show, NovaScotian Crystal finally turned a
profit in the fall of 2001. Ryan and McCulloch celebrated their success over
something stronger than tea. And wouldn’t you know it: They didn’t drink the same
brand of beer.
Today, after years of operating near bankruptcy, NovaScotian Crystal has
expanded its product lines, launched a series of online catalogues, and markets its
products worldwide.
Questions
1. How would you describe the personalities of Denis Ryan and Rod
McCulloch?
2. Describe the extent to which personality plays a role in how Ryan and
McCulloch run NovaScotian Crystal.
3. Explain the perceptions of each of these two men.
4. What role do these perceptions play in how the two persons lead the
company?
Organizational Behavior Case Study
Case Three: Gourmet Foods Works on Employee Attitudes
Gourmet Foods is a huge grocery and drug company. It has more than 2400
supermarkets, and its Premier and Polar brands make it the fifth-largest drugstore
company in North America. In a typical year, shoppers will make 1.4 billion trips
through its stores.
Gourmet Foods competes against tough businesses. Wal-Mart, in particular, has
been eating away at its market share. In 2001, with revenues flat and profits
falling, the company hired Larry Johnston to turn the business around.
Johnston came to Gourmet Foods from General Living Medical Systems. It was
while he was at General Living that Johnston met a training specialist named
Roger Nelson. Nelson endeared himself to Johnston when the latter hired Nelson
to help him with a serious problem. At the time, Johnston had been sent to Paris to
fix General Living’s European division. The division made CT scanners. Over the
previous decade, four executives had been brought in to turn the division around
and try to make it profitable. All had failed. Johnston responded to the challenge by
initiating some important changes—he made a number of acquisitions, he closed
down inefficient plants, and he moved factories to Eastern European countries to
take advantage of lower labour costs. Then he brought in Nelson to charge up the
troops. “After we got Roger in,” says Johnston, “people began to live their lives
differently. They came to work with a spring in their step.” In three years, the
division was bringing in annual profits of $100 million. Johnston gives a large part
of the credit for this turnaround to Nelson.
What is Nelson’s secret? He provides motivation and attitude training. Here is an
example of Nelson’s primary program—called the Successful Life Course. It lasts
three days and begins each morning at 6 a.m. The first day begins with a chapter
from an inspirational handout, followed by 12 minutes of yoga-like stretching. Then
participants march up a hill, chanting, “I know I can, I know I can.” This is followed
by breakfast and then a variety of lectures on attitude, diet, and exercise. But the
primary focus of the pro- gram is on attitude. Says Nelson, “It’s your attitude, not
your aptitude that determines your altitude.” Other parts of the program include
group hugs, team activities, and mind-control relaxation exercises.
Johnston believes strongly in Nelson’s program. “Positive attitude is the single
biggest thing that can change a business,” says Johnston. He sees Nelson’s
program as being a critical bridge linking employees with customers: “We’re in the
business of maintenance and acquisition of customers.” With so many shoppers
going through his stores, Johnston says there are “a lot of opportunities for
customer service. We’ve got to energize the associates.” To prove he is willing to
put his money where his mouth is, Johnston has committed $10 million to this
training. By the end of 2006, 10 000 managers will have taken the course. They, in
turn, will train all 190 000 Gourmet Foods “associates,” with the help of tapes and
books.
Nelson claims his program works. He cites success at companies such as Allstate,
Milliken & Co., and Abbott Labs. “The goal is to improve mental, physical, and
emotional well-being,” he says. “We as individuals determine the success of our
lives. Positive thoughts create positive actions.”
Questions
1. Explain the logic as to how Nelson’s three-day course could positively influence
Gourmet Foods’ profitability.
2. Johnston says, “Positive attitude is the single biggest thing that can change a
business.” How valid and generalizable do you think this statement is?
3. If you were Johnston, what could you do to evaluate the effectiveness of your
$10 million investment in Nelson’s training program?
4. If you were a Gourmet Foods employee, how would you feel about going through
Nelson’s course? Explain your position.
Case 4 Conflict Management
1. A Case Study on Conflict Management
Shibru and Abdu both work for a software development company. The manager of the new
product division was originally the leader of the project team for which she interviewed and
hired Abdu. Shibru, another project team member, also interviewed Abdu, but strongly opposed
hiring him for the project because she thought he was not competent to do the job.
Seven months after Abdu was hired, the manager left the project to start her own company and
recommended that Abdu and Shibru serve as joint project leaders. Shibru agreed reluctantly
"with the stipulation that it be made clear she was not working for Abdu. The General Manager
consented; Shibru and Abdu were to share the project leadership.
Within a month Shibru was angry because Abdu was representing himself to others as the leader
of the entire project and giving the impression that Shibru was working for him. Now Shibru and
Abdu are meeting with you to see if you can resolve the conflict between them.
Shibru says: "Right after the joint leadership arrangement was reached with the General
Manager, Abdu called a meeting of the project team without even consulting me about the time
or content. He just told me when it was being held and said I should be there. At the meeting,
Abdu reviewed everyone's duties line by line, including mine, treating me as just another team
member working for him. He sends out letters and signs himself as project director, which
obviously implies to others that I am working for him."
Abdu says: "Shibru is all hung up with feelings of power and titles. Just because I sign myself as
project director doesn't mean she is working for me. I don't see anything to get excited about.
What difference does it make? She is too sensitive about everything. I call a meeting and right
away she thinks I'm trying to run everything. Shibru has other things to do "other projects to run”
so, she doesn't pay too much attention to this one. She mostly lets things slide. But when I take
the initiative to set up a meeting, she starts jumping up and down about how I am trying to make
her work for me."
Questions Regarding this Conflict:
1. Abdu and Shibru seem to have several conflicts occurring simultaneously. Identify as many of
these individual conflicts as possible.
2. What are the possible ways to deal with the conflict between Abdu and Shibru (not just the
ones that you would recommend, but all of the options)?
3. Given all the benefits of retrospection, what could or should have been done to avoid this
conflict in the first place?
N.B. A detail and brief answer is required you can give background
information/introduction about each case
