Case 8: HIGH NOON AT ALPHA MILLS Arif Hassan and Thivagar Velayutham, International Islamic University, Malaysia Alpha Plantations Sdn. Bhd. is an oil palm planta- each, and each supervisor (including Ang) was in tion located in Malaysia. It consists of an oil palm charge of one shift. estate and one palm oil mill. It is a wholly owned Ang was responsible for the smooth daily palm subsidiary of a British multinational company and oil processing operations. He coordinated the activi- was founded with the purpose of supplying crude ties of all three shifts with the two supervisors, pre- palm oil for its parent company's detergent manu- pared the daily production reports, dealt with facturing business. Since its formation, most of the short-term human resource planning issues, handled managers have been recruited from the United minor discipline issues, and set and evaluated short- Kingdom, with many British ex-soldiers and police- term performance targets for all three shifts. In addi- men joining up. Ang Siow Lee joined Alpha Mill in tion, he acted as the "gatekeeper," which meant that 1965 at the age of 15 as a laborer, and he rose any mill personnel who wished to see the mill man- through the ranks to become the most senior non- ager must first see Ang, who tried to solve the prob- managerial staff member at Alpha. Ang was the se- lem, which may be anything from house repairs to a nior production supervisor in Alpha's palm oil mill. request for an advance on wages. In rare cases when His immediate superior was the mill manager, and Ang could not resolve the issue, the matter was he had two junior supervisors to assist him, The brought to the mill manager. Ang ran a tight ship, mill operated on a three-shift cycle of 25 operators and he never let anyone forget it. His superb >> . technical competency helped him keep the mill in The old colonial and hierarchical company top shape. He was accustomed to receiving the high- culture was not conducive to performance est appraisal ratings from the mill manager, who ap- preciated his firm, methodical, almost militarily improvement efficient way of running the mill. The palm oil in- Information was not shared across the mill. dustry in Malaysia faced many challenges in 1999. Operators knew about only their own little area World oil prices plunged due to oversupply, and in the mill and almost nothing about the com- palm oil prices hit a 15-year low. This cut the profit pany as a whole. margins of all palm oil producers and caused Alpha Davison proposed to remedy the situation with the Mill to post losses regularly. following initiatives: Captain Chubb, the 54-year-old ex-Royal Engineer and mill manager, was at a loss as to how to improve Empower operators by reorganizing the shifts performance. "We are doing nothing wrong, and into self-directed production teams, with the have met all our efficiency targets. It's this market supervisors playing the role of "facilitators," that is killing us!" he exasperatedly explained during and thereby gain commitment. the annual year-end visit of the directors from London. Install new technology and automation. Very soon, Chubb was given his marching orders. In early 2000 a new mill manager was appointed who Adopt more stringent performance measures. was very different from all his predecessors. Ian Davison began to implement and execute these Davison, a 32-year-old who hailed from Edinburgh, initiatives by organizing an excursion to a local picnic Scotland, was not a career plantation engineer and spot for the entire factory. After the icebreakers, had never managed an agricultural product process- games, and lunch, he held a briefing session on the ing mill before. He was actually an electronics engi- beach, where he explained the situation Alpha neer, with an Ivy League MBA, on the fast track to a Mill was in and the need to make changes. He then top management position. His previous appointment unveiled his plan for the first time. The response was was manager of a detergent factory in Egypt, where enthusiastic, although some operators privately con- he managed to streamline and modernize operations fessed to not understanding some of the terminology and increase financial performance drastically. Head- Davison used. At the end of the excursion, when there quarters in London had high hopes that he would be was some time allocated for feedback, Ang expressed able to do the same with Alpha Mill and return it to his full support for Davison's plan. "We in Alpha Mill profitability. His first action was to analyze opera- have full confidence in you, our new leader, and we tions at Alpha Mill and look for ways to reduce pro- assure you of our 110 percent support to make your duction costs and increase profits. He arrived at the plan a success!" he said at the end of his speech. following conclusions: When the new machinery had been installed and each shift had been reorganized into self-directed Ang's response to this was to push himself harder. between production teams to ensure that the perfor- He was always the first to arrive and the last to leave. mance gains were maintained. The effect on Ang was He would spend a lot of time troubleshooting process devastating. He became withdrawn and began to problems. He pushed his operators even harder, but drink more than usual. His presence at team meetings he felt that he had less of a "handle" on his operators became a mere formality, and he contributed next to now that they had direct access to the mill manager nothing, taking a backseat to other team members. He and most of their minor needs were seen to by him. spoke very little to mill personnel and became a mere Sometimes he became annoyed because of his opera- shadow of his former self. tors' mistakes and would resort to shouting and curs- Davison was very aware of the changes taking place ing, which had the immediate effect of moving people on the mill floor. He decided that it was time to have in the direction he wanted. This was in contrast to the Ang removed from his position. He began to plan for mere glare that would have sufficed previously. a reshuffle of Alpha Mill's organization chart: Ang The continued poor performance of Alpha Mill would be promoted to the new position of mill execu- affected Ang's midyear appraisal rating, which fell tive, a staff position with a small pay raise. His re- from "excellent" to merely "adequate." During the sponsibility would be to advise the mill manager on appraisal interview, an annoyed Davison bluntly technical, quality, and efficiency problems faced by told Ang that he needed to understand clearly what the mill. He would be assigned to carry out minor im- the initiatives were all about and that he had to let provement projects and performance audits from time the team take some responsibility, make mistakes, to time. Raman would be promoted as supervisor and and learn from them. "With your knowledge of this report directly to the mill manager. Ang would no lon- mill, you should be able to provide them with all the iger. Ang would no lon- mill, you should be able to provide them with all the ger have any line authority over the production team. technical input they need," he said. Davison also This reorganization was quickly approved by head added, "It might help if you treated our people with a office, and Davison proceeded to lay the groundwork little more respect. We aren't living in the 1940s any- for the announcements and the necessary paperwork. more, you know." Ang was thunderstruck by the Little did he foresee what was to follow. appraisal but did not raise any objections on the Ang was in the head office one morning when the spot. He silently deferred to Davison's judgment and personnel executive's clerk congratulated him on his promised to do better. He also reiterated his utmost imminent promotion. A surprised Ang enquired fur- support for Davison and his plan. ther and learned of the plans that Davison had in store After the midyear appraisal, there was a noticeable for him. That was the final straw. He rushed back to change in Ang's demeanor. He became very quiet and Alpha Mill just as Davison was about to conduct his began to take a less active role in the daily running of noon mill inspection. The confrontation was very loud, the mill. He was superficially polite to the operators acrimonious, and public. It ended with Ang being ter- and answered most requests for help with "Get the minated for insubordination and gross misconduct . Eeam together and discuss it among yourselves. Show After Ang left, Davison felt that the obstacle to the boss that you can solve it for yourselves." At first better commitment and morale was gone and that the teams were at a loss and mill performance suffered performance would improve greatly. He was very Dadly, but within two weeks the team had found its wrong. Team performance began to deteriorate , and Feet and performance began to improve. One of Ang's no amount of pep talks could improve it. He began munior supervisors, Raman, was able to coordinate a to wonder what had gone wrong.

Question

Explain the Organizational behaviour Issue : Changes in Organizational Culture and structure. Explain and Apply the issue - what is going on in the case; cite examples from the case some of organisational problems manifested arising from the issue where it shows top-down communication are used; the problems and advantages of top-down communication (related to the case). Include references as well.