Case Study: Znhell AG "Now we ll see the real fun starting" thought Frederick Grunwald (41) when hung up. His old friend Dirk Wiesner (39) hat just given him the fresh hot news that soon would filter through the other regional organisations as well: The board apparently had decided in its latest meeting to open up a new sales region in Germany. This was no miracle, because Zhnhell had been able to score increasing sales as well as profits throughout the past years. The Znhell AG was a comparatively young industrial company that was selling energy distribution and metering equipment in the German market. The company had been founded 24 years ago by Werner Zngerle and his partner Urlich Heller from Hamburg who were now the managing directors. After opening further sales offices in the nearer region a new sales region had been opened in Essen in western Germany 12 years ago. After the 1990 a number of former state owned companies had been bought up which now formed the region East Germany. Only the South of the country had not been taken care of so far, but this was to change now if Dirk Wiesner was right. Fredrick Grunwald had started as a project manager at Zhnhell and has now been for 4 year heading the profit center Bremen in northern Germany. He was aware that 4 years as a head of PC were not a particularly long time but he had always delivered good work and excellent numbers throughout that time. Especially the founder Heller was very content with his work. He therefore hoped to be considered when the new head of region position was to be allocated. Since his time in the Hamburg profit center Grunwald had stayed in touch with Sonja Rollberg (47). They even had had an affair for a short time but they had let hardly anyone know that inside the company. Frederick had ended that relation relatively soon because of someone he met on a holiday and he thought that by now there had been enough time passed for this to be over and done with. Sonja was by now the head of HR and he was sure she would be among the first to hear about how the new job would be allocated. He was not sure whether he should call her or whether that would be too early. Finally he picked up the phone again and called her. "Hi Sonja, how are things going? Is that right? I am hearing through the grapevine that there will soon be a new head of region position for a South region? Have you heard something more specific about that?" "Listen Fredrick, you know that I am not supposed to talk about things like that. Only so much: Zngerle and Heller are negotiating with some smaller firms from Munich and Stuttgart but as far as I know there are no concrete results to that yet. And as long as that is not clear there will also not be a South region." Grunwald did not wanted to hear more and asked another time: "Assuming that this region South will be installed at some point in the future, are there plans already about whom to give it to?" "Fredrick this is now clearly taking it too far. I told you there is no region South at the moment and therefore there is also no vacant head of region position. Zengerle will let us know when the time has come" Sonja made clear, that she could not say more. Somewhat surprised by Sonjas reaction he called Dirk Wiesner, who worked as assistant for Zngerle. "Hi Dirk, now, what is happening there after all? I just talked to Sonja Rollberg and she flatly refused to know anything about a new Sales region. I almost think I took it too far and I should not have called her." "I don t understand that. Did she rally deny it? It was only yesterday that I asked her on behalf of Heller - and of course strictly confidential - that she should put together the profiles of the possible candidates until Monday. Probably they want to present the new head of region in the extended management team session next Friday and they don t want to spill the beans before that." "Then I don t seem to be on the shortlist, right? Otherwise she would have given me some sort of hint, wouldn t she? After all we have worked together in Hamburg for a number of years and I would still call her a friend despite that small thing back then?" Wiesner replied "I don t understand that either. On one side I know that Zngerle and Heller like your work and that it is them who finally take the decision. If Sonja on the other side pretends to know nothing that doesn t make any sense. I ll try to see what I can find out and talk to you later." After talking to Gunwald Wiesner directly went to Zngerle in order to report back. "Did he take the bait?" asked Zngerle when Wiesner looked around the tinted glass door. "Yes, bait hook and sinker. He wants by all means to have a place in the race about the head of region position and he immediately called Sonja Rollberg. But she has denied to know anything as agreed. This has alienated him for the time being and he will keep silent for the next days." "Very well, Dirk, that give us a bit of time. I know that Ulrich Heller would like to have Gunwald on that position but that would be a disaster. Schilling is the only one who can come to grips with Munich and Stuttgart in such a way that those companies quickly follow our line and become profitable. Grunwald may be technically excellent but he is simply too soft. If only Schilling would generate some better numbers then Heller would immediately agree to taking him!" Bruno Schilling had now been head of PC in Hamburg, the largest profit center of the whole company, for 10 years and he felt more than ready to take the next step. He had been omitted two times now. The last time when the head of the East region had surprisingly left and his position had to be re-staffed quickly. Alrady then Schilling had pondered the thought of leaving the company but had decided against it. After the last tax audit he knew that it could become quite expensive to the company if he would be omitted another time. Schilling just came back from lunch when his phone rang. "Hi Bruno this is Werner Zngerle! The contrats in Munich and Stuttgart are signed and the region will be opened by July 1. This is in 4 weeks and would announce you as new head of region in the coming week as we have discussed already. Until then I have to convince Heller so it will be best if you keep the ball low until then." "To mention something completely different. You know that the card of the tax auditor is on my desk. I am somewhat uncertain about what they will think about our depreciation policy." Zngerle din t want to hear anything about that. "Don t you worry, this will be alright." While Zngerle was responsible for all financial management questions in the management board Ulrich Heller took care of all technical questions. Personnel questions were always decided by the two of them together which had worked very well in the first years of their cooperation. Recently, however, there had been an increasing number of conflicts which did not escalate for the sole reason that Heller was the calmer one of the two and usually gave in at the last moment. It was clear to both of them that they hardly had had a more important decision to make than the one right now. They met in Zngerles office in order to talk about their respective candidates. After Zngerle had presented all his arguments in favor of Schilling Heller expressed his surprise that Sonja Rollberg had not included Frederick Grunwalds profile. Heller: "I don t understand this. I told her very clearly that I also see Grundwald as one of the possible candidates. Why don t we have a paper about him on the table? Here are, Schilling, Mauser, Knittel and Bergmann. Mauser already told me that he wants to stay in North as a deputy head of region. His daughter started to attend school last summer and his wife has a good job at the university hospital. So he is out of the question. Viola Knitte is too young whit her 34 years, we are agreed about that. She is doing a good job as head of procurement in the West region, but she simply does not have the experience for something like the Munich job already yet. We really should think about Grunwald. He is delivering the best results since years, his projects are going well without almost not exception and he has the potential to continue to develop very well. Zngere: "Basically I do agree to you, Grunwald is one of the promising candidates. Two weeks ago I talked to him, to test the water, about whether he would be really interested in going to Munich. But

my impression was that he is not really interested. Then I talked to Sonja Rollberg about him, the two of them know each other from their common time in Hamburg. She confirmed my impression and meant that he is feeling very well in Bremen. Ulrich, you know just as well as me that if you want to perform in a job like this you have to be really motivated. You sure remember the first years of the East region, don t you? And the start in West also was quite a ride. I m telling you Schilling is the right guy. He can get things done, if it is necessary. And believe me, it will be necessary." Heller "Werner, this is going a bit too quick for my taste now. When Mauser told me that hew is not interested in the job he also said that he thinks Grunwald would be an excellent alternative. Especially the initiative with which Grunwald is doing his job is really beyond compare." Zngerle continued to convince Heller about Schilling. He, however, felt that his partner had not let him in to all of the truth. With an excuse he managed to interrupt the meeting before Zngerle could try to impose on him that the closed the decision. "Werner in two hours I have a meeting with the TV about the test station that we are supposed to deliver to them and I really need to prepare myself for that. We don t want to loose this order after everything we had to do to get it. I ll come to your office tomorrow morning and then we decide whom we send down south." Before Zngerle could say anything Heller hat closed the door behind himself. The meeting with the TV was no challenge for Zngerle so now he had two hours of time in order to get to the bottom of that matter. First of all he called Mauser: "Hi Mathew, I wanted to have a word with you about Gunwald once more. Even if it is not official until Friday - we will open our region South until July 1st and now we have to find out who can and will be leading it." Mausere then confirmed for another time that he found Grunwald to be the most capable person. Mauser, who happened to be in the Bremen office because of a customer meeting, decided to go into Grunwalds office. "Fredrick I just talked to Ulrich Heller. It s not official yet but the region South is going to be opened on July 1st and they are in the process of deciding who is going to be the head of region. A couple of weeks ago I told them, that you would be an excellent match, and now he is telling me, that Zngerle and Rollberg say that you are not really motivated and would prefer to stay in Bremen? Is there something about that? Or is this just one of Zngerles famous red herrings?" Grunwald: "So it s true." And then more thoughtfully "You now, Mathew, naturally I am very motivated and you know that I would pack my stuff and move there any day. The other day I was talking to Sonja and she denied outright that the region South would get implemented after all. I don t understand that. Who is against me and why? What do you think I should do now?" Mauser "This is really hard to explain. That Zngerle is constructing something like that is to be expected of him but I don t understand why Sonja is playing along. Did you have any quarrels with her? You can t do anything else but call Heller now. You can tell him that the two of us have been talking about that but Zngerle should not get to know it. In the meantime I try to find out whom Zngerle wants to forward to Munich, maybe that will help to get a clear picture." While Grunwald worked up the courage to call Ulrich Heller, Mauser phoned Zngerles assistant. She is always informed about anything and is playing in the same tennis club as he is. She could of course not tell him, whom Zngerle preferred, but she let him know that Zngerle in the last time had met Schilling for a number of lunches. This information she said, was of course confidential. Mauser thanked her and immediately called Schilling. "Bruno, how is it going? I m just reviewing the plans for the next quarter. Do you think you can cope with the planned order entry of 3 million? Isn t that a bit too optimistic?" "I think the 3 million are feasible" was the answer "Whether the planned margins are realistic is beyond me, for that you have to talk to the project managers, and on that I soon won t have any influence." Mauser understood that Schilling assumed to have the ticket to Munich already

for certain. He finished the call and called Heller in order to tell him about it. He thanked Mauser for his openness and immediately started to collect arguments, that might be speaking against Schilling. After his meeting with the TV people Heller had exactly 12 hours left before he would have to get back to the office of his partner. He knew that Zngerle was not picky if there was something at stake that he wanted. So he had to reshuffle his deck of cards. After a number of e-mails and phone calls he finally talked to Uwe Nordmann from the IT department. Nodmann still owed him a favour after he had facilitated for this daughter to do an internship in Singapore. He asked Nordmann to have a closer look about what Schillings team-internal database contained about the last projects. In the beginning Nordmann could not find anything unusual. But then he found "This is interesting. In some projects Schilling booked some of the travel expenses 2015 only in the 2016 expenses. That must have been quite nice for hist 2015 profitability." Heller thanked Nordmann. Now he had something that he could pull out if needed. * 1. Analyse the case from the perspective of political processes - which elements can you identify here? 2. Is it possible to predict how the new head of region position will be allocated?