Dairy Engineering (NZ) Ltd has its headquarters in Hamilton, New Zealand, with manufacturing plants in South Auckland and Christchurch. The company manufactures equipment for the dairy industry. In its early years it focused on the domestic market, but in the last five years it has expanded into the export market. The company employs 450 people, which makes it a large company by New Zealand standards.

The accounting department at the head office is organised into two sections: cost accounting and management information services (MIS). The accounting department is structured as shown inExhibit 1.

Exhibit 1: Description of Employees in the CaseNamePositionDescriptionRob PoorChief accountantRob is the accounting department manager. He is 40 years old and is a qualified accountant with a chartered accounting (ACA) qualification. He has been with the company for six years. He is an unassuming person regarded as a bit 'soft' by his staff.Vernon MooreChief cost accountantVernon is 30 years old and is a graduate with an ACA qualification. He joined the company 18 months ago. He is considered an easygoing type and is well liked by his staff.Peter BrutonManagement accountantPeter is 37 years old and has a science degree in dairy technology. He is also studying part-time for a management degree through Massey University. He is regarded as 'moody' and is not well liked by his staff.

Fran, the New Graduate

Fran Hayden was in the final year of her bachelor of management studies (BMS) degree at the University of Waikato, where she had proved to be a high achiever. Fran was interested in a position with Dairy Engineering because of the opportunity to gain practical experience and the company's higher starting salary compared to the industry average.

Fran sent her curriculum vitae to the company, and two weeks later she was invited to an interview with the chief accountant. She was surprised at the end of the interview to be offered the position of assistant cost accountant. Fran said she would like to think it over. Two weeks later, Fran had still not replied, so Rob telephoned her to ask if she was going to take the position. Although not totally convinced that she would enjoy the job, Fran decided to accept the offer.

The First Day at Work

Like many of her peers, Fran was glad to be leaving university after four years of study. She was looking forward to having money to spend as well as reducing her student debt. In order to 'look the part', she had gone further into debt to buy new corporate clothing. On reporting to the accounting department, she got her first shock in the real world. No one was expecting her! Even worse, she discovered that there was no vacancy for her in cost accounting. Instead, she had been assigned to management information systems (MIS).

Mike, a coworker in MIS, accompanied Fran to the department, where she was introduced to two other colleagues, Tom and Adrian. They seemed to be a friendly bunch, as apparently was her boss, Peter Bruton, who explained that her main duties were to assist with compiling information for the monthly management report known as 'Big Brother'.

After two weeks, the time came to compile Big Brother. Fran found that her part was almost entirely clerical and consisted of photocopying, collating, binding, punching and stamping the pages of the report. She then had to hand-deliver copies of the report to the senior manager at headquarters.

After Big Brother was completed, Fran found that she had little to do. She began to wonder why MIS needed four people.

The Big Opportunity

One afternoon, the chief accountant called Fran to his office to tell her about an upcoming management workshop in Auckland on performance measurement. Rob talked about the importance of staff development and said that he would like to see one of his younger staff members attending the workshop. He then asked Fran if she would be interested. She jumped at the opportunity. Unfortunately, her boss was away on two weeks' leave at the time, but Rob said he would talk with Peter.

Fran enjoyed the workshop, particularly rubbing shoulders with experienced managers, staying in an Auckland hotel and generally acting the management part. Even before returning to Hamilton, she wrote a detailed report on the workshop for the chief accountant. On her return to Hamilton, however, she found all was far from well.

On Sunday evening Fran was telephoned by her colleague Mike with some disturbing news. When Peter had returned to work to find that Fran was in Auckland, he was furious, complaining that he had not been consulted and that his authority was being undermined.

Peter: Fran is no longer employed in this section.

Fran returned to work full of trepidation, only to find that the expected encounter with her boss did not take place because he was in Christchurch. She handed two copies of her report about the workshop to the chief accountant's secretary before taking the opportunity to seek the advice of her colleagues in her boss's absence.

Fran: I am really worried. What do you think I should do?

Adrian: Stop worrying about it. He's just letting off steam. I have seen this all before. He'll get over it.

Fran: Come on, get serious. He is my boss! He can make things very difficult for me.

Mike: I think you should talk with Rob. After all, he's the one who suggested you go. It's not like it was your idea. He has to stick up for you.

The next day Fran managed to get an appointment with the chief accountant. She started by saying that she found the workshop very useful. She then brought up her fears about Peter's displeasure with her attendance at the workshop, to which the chief accountant responded:

Rob: Well, yes, he was a bit upset, but don't worry, I'll sort it out. The report was really good. By the way, I think you should treat it as confidential. Don't show it to anyone or discuss it with anyone. Is that OK? Don't worry about this. I assure you that I will sort it out.

Fran left the meeting feeling reassured but also a bit puzzled, wondering how Rob could have read her report in such a short time.

On Thursday Peter returned to work and just before lunch called Fran into his office, where he proceeded to attack her verbally, saying that she had 'connived' behind his back to attend the workshop and that she had never asked for his permission. He said that he realised she was an intelligent 'girl' but that she was 'sneaky'.

Peter: You better know which side your bread is buttered onthat for better or worse, you are in my section. No other section would want you.

He then called Mike in and spoke to him.

Peter: I don't want Fran wasting any more timeshe is not to make any private calls from work.

Later, in 'confidence', he also spoke to Janet, one of the administration assistants.

Peter: Don't go talking with Franshe has far too much work to catch up on.

Naturally, Janet did tell Fran!

The following week, Vernon happened to pass Fran in the corridor and stopped to talk with her. Fran had met Vernon only briefly during her first week in the company and was surprised when he asked her why she looked so miserable. She explained, and he said that they should talk with the chief accountant; taking Fran with him, he went to Rob's office. Vernon said that they needed a word, and Fran listened as Vernon outlined the situation to Rob. Fran made it clear that if Peter continued to treat her this way, she would have to ask for a transfer. She also said that there was certainly not enough work in MIS to keep her occupied for more than a day or so each week.

The chief accountant listened, and then asked her to give him a written report of what had happened since she had joined the company, including the latest incident with her boss. This, he said, would be brought up at the next senior management meeting. On the weekend Fran wrote the report, which included a request for a transfer out of MIS due to the lack of work and her boss's attitude toward her. On Monday morning she handed her report to the chief accountant's secretary.

Fran expected a reply but by early afternoon had heard nothing. At the end of the day, however, Peter called all his staff into his office. He was obviously in a good mood and told them that he had put his plan for revising Big Brother to the management meeting and had received an enthusiastic response. As he spoke, Fran noticed the colour draining out of Mike's face. On the way out, Mike told her that Peter was describingMike'srevision plans, not his own. Mike resolved never again to give his boss one of his ideas.

Mike: He just uses other people's brainsbut that's the last time he uses mine.

Fran drove home from work feeling despondent. She wished she had never joined the company. Her job was boring, almost entirely clerical, and it certainly did not require a degree. She was also taking the stresses home, resulting in quarrels with her boyfriend and housemates.

Fran concluded that she had only two alternatives: a transfer or resignation. But to leave her job after less than five months would hardly impress any future employer. In desperation, she went to talk with Vernon, who she thought would be sympathetic, but she received more unwelcome news. He told her about the outcome of the senior management meeting. Contrary to Fran's expectation, the chief accountant had not confronted Peter. In fact, it appeared that he had been eclipsed by Peter's presentation for the revision of Big Brother and the chief accountant had not attempted to raise the issue.

Vernon was frankshe must either transfer or resign. Then, to Fran's surprise, he suggested she apply for a position in his section that would become vacant in three weeks' time. One of his assistant accountants was leaving to go overseas at short notice, and he did not have a replacement. Vernon cautioned, however, that Fran's only chance was to apply directly to the chief accountant; that would force the issue. With a formal, written application before him, the chief accountant would have to make a decision. Just as certainly, Peter would resist the request. Later Fran drafted a letter to Rob requesting that she be transferred from MIS to the upcoming position in cost accounting.

The Confrontation

The next morning, Fran took her request to the chief accountant. After he read it, she was surprised by his comment.

Rob: You really needn't have done this, you knowI intended dealing with the situation.

Fran left Rob's office wondering what to believe. From her desk she watched as Peter made his way across to the chief accountant's office. The meeting was brief. Five minutes later, he left Rob's office, and as he passed by Fran's desk, he spoke to her in a loud voice.

Peter: Franyou are finished at this company.

Fran saw her colleagues duck their heads down and pretend to be working. No one envied her position. She wondered how, in such a short time, she had ended up in such a situation.

Question 4:

Examine Fran's decision to take this position with Dairy Engineering using bounded rationality. Using the model, analyse each dimension and evaluate the role of emotional effort versus rational effort in her decision making.