Change at JLC Manufacturing Steve, the new Executive Vice President and Plant Manager, had a striking impact on the plant workers. The people in the plant believed every word he said to them. Steve went straight to the shop floor. He walked among them. He became a part of them. For years, there had been layoffs, strikes, and all the distrust that came with this. But Steve seemed different. There was also a new Director named Laura who had joined Steve in the move. She and Steve ate in the cafeteria with the union employees. She had an easy laughter that made everyone relax. No one knew exactly what Laura did, but her title was Director of Improvement Initiatives. Together she and Steve made the plant seem a special place to work; a place where the workers could actually challenge existing processes and offer innovative ideas. There was now a comfortable look in the workers' eyes as Steve said to them: "You know, management does not JLM Manufacturing Organogram (reduced version) know crap about the things you do out here in the machine shop. You run this place. Your ideas are the only ones that matter to me!" That's how it began in October 2012 - two teams of hourly guys in the machine shop focused on improving the processes by which they did their work. For the first time, a Vice President and Plant Manager wanted the production people to give him ideas about how the plant should operate and to offer suggestions for improvement. On one occasion, Steve and Laura pulled the machine shop people together after hours (and paid them overtime for this) and asked: "What problems exist for you?" Steve personally began writing their answers on a flip chart. After a little time had passed, he asked: "What can management do to help you solve these problems?". Steve asked the Machine Shop employees (management and non-management) what things they cared about passionately at work. Their BHM357 responses were: safety, job security, product quality (so we don't have to do rework), co-workers, getting our work done fast so our bosses will leave us alone, and being respected. Steve and his team of Directors used these responses and others obtained in similar scenarios throughout the factory to revise the organisation's core values. Steve involved floor managers and people in the Training Department in teaching management and non-management employees about process ownership, management, and improvement; leadership; empowerment; change management; quality theories and tools; and many other performance excellence concepts. The Directors in the leadership team observed this 'strange' scenario cautiously. Peter, Director of Production and Supply, was a reserved, introspect man and didn't really enjoy having to do small talk all the time around the factory. Peter always believed that plant workers should be given clear directions and goals about and be rewarded accordingly. They didn't have sufficient understanding of the business to provide suggestions for the management of the factory and any attempt at such could only have bad results. This had always been his philosophy and he had never had any complaints from any of his subordinates. George, Director of Quality, was also not pleased with Steve's approach. For months he had been setting the grounds for his promotion to Vice President and Plant Manager, developing strategic alliances with other directors and being particularly friendly to managers and plant workers, and he had been taken by surprise by Steve's arrival. George didn't show any overt opposition to Steve, he was generally agreeable and friendly, but he shared his concerns with some of the other directors. Samantha, the Finance Director, was also worried by the costs of the business restructure and the impact these could have on the business if something went wrong, putting them in a vulnerable position in relation to the Corporate Office. She liked to play safe and she valued the factory's economic viability above everything else. Louis, the HR Director, was in general in agreement with Steve's new approach and was happy to see a more motivated and empowered workforce, but felt often that Steve was stepping over his areas of competence, which made Louis feel uneasy. Dan, the Director of Marketing, was always very supportive and enthusiastic during the management meetings and tried to support Steve as much as possible but he was also very good friends with George and could see a point to the issues he raised. Laura, on the other hand, was very enthusiastic and was happy to have found a place where she could see her personal values mirrored. The director team met frequently to discuss their strategy but Steve seemed to rely more on Laura than on any other of the directors. They worked well as a team but it was possible to see that some director team members were not entirely on board. For two years, everyone in the plant was involved in documenting, managing, and continuously improving the processes which they owned. Customers and suppliers were also involved in the improvement initiatives. For the first time in the history of the plant, the hourly union employees were involved in the development and execution of strategic and tactical plans. They had never been so engaged and Page 3 of 5 satisfied with their work. The stock price soared. Everything seemed to run smoothly. Then the plant lost a bid for a major contract, leading to the intervention of the Corporate Office. The company's CEO arranged meetings with the six directors before deciding on a course of action. Steve seemed unable to exert any power over the Cooperate Office, as he had done very little to keep them in the loop. After the course of meetings, Corporate asked Steve to lay off 20% of the people at the plant. Such a reduction in force had historically seen the lowers levels of the organisation being laid off first. Steve was almost in tears as he discussed the situation with his directors. Peter said emphatically, "That's the reason you can't involve hourly people in strategic planning and suggestions for improvement. It just sets them up for disappointment in, and distrust of, management." Samantha, Director of Finance, and Dan, Director of Marketing agreed. George, although also worried about the problems of the factory, was privately pleased to watch Steve's downfall. He knew that he would have been much better suited for the role and he would have done a much better job, so he was convinced he would now be offered Steve's position. After the meeting was over, Laura stayed to talk with Steve. She said, "Why do we have to lay off people from the bottom up?" She suggested, "Why don't we lay off people (or let them retire) from the top down? We have 12 directors, Let's merge areas and have 7 directors. We have 75 managers. Let's merge areas and have 25 managers. We have 500 supervisors. Let's merge areas and have 100 supervisors. Let's keep all the hourly people and cross train them. Let's keep all the engineers and let them help us figure out how to get the next big contract." Steve's response was, "Laura, you are one of the 12 directors. You know that this will not be easy." Laura replied, "Yes, but the hourly guys will know we care about them when some of us leave". Steve concluded this would be too difficult and with Louis, the Director of Human Resources, executed the organisational restructuring in order to meet the Corporate-mandated goal of 20% reduction in employees. Within six months, Corporate asked for another 20% reduction in headcount. With his attorney by his side, Steve flew to corporate headquarters and met with the CEO and his top executive team to ask for a delay in this headcount reduction until the next contract was acquired. When the CEO would not relent, Steve told him that it was a matter of integrity for him to stand up for people who had actually saved the plant during the contract loss. He then resigned as Executive Vice President and Plant Manager and let his attorney negotiate his settlement. When that was done, Steve called Laura first and told her to prepare her own exit strategy since he was no longer her boss because he had refused to lay off any more people. He asked Laura to call an all-plant meeting for the end of each shift for the next day. At each of the shift meetings, Steve informed the employees he was leaving and tried his best to convey hope for the future. He told the people that they had made a huge positive difference in the plant operations and that they should continue to operate the same way in the future. On each shift, as Laura looked around at the people, they all had tears in their eyes. Q1. ANSWER ALL PARTS OF THE QUESTION BELOW Using theory and evidence from Organisational Behaviour, analyse the JLC Manufacturing case study by addressing each of the following three issues: - Analyse Steve's leadership style and contrast it to other examples of leadership in the case study. - In light of what you learned about individual differences, motivation, and team work, discuss the reaction of TWO different directors in the leadership team to Steve's management approach. - Based on theory and evidence discuss what Steve did right, and what the consequences were for the factory. Also, discuss what his mistakes were in your view. What could he have done differently? Answers to all three elements of the above question carry equal weight in determining the overall mark. (100%)