Gravity Ltd. (GL) was a US multinational firm, engaged in the manufacturing of high-quality washing machines, refrigerators and other similar goods for the South African market. It set up its manufacturing plant in 1971 in outskirts of Cape Town city in South Africa. The plant workers were organized and had a strong independent union, which had almost total control on its 620 employees in the worker category. It also employed 317 managers/supervisors, and 230 contract employees. The union believed in its policy of adversarial struggle and saw itself as the sole custodian of the employee well-being. GL continuously updated its technology, and made huge profits despite high wage cost due to their very strong union; but still there was enormous scope for improving productivity. The company recently appointed Richard Brooke, a new expatriate managing director (MD) from the US, who decided to experiment a small group (SG) activity in the company. He aimed not only better productivity but also improved relations with employees in general. Detailed discussions were held with the plant workers, middle managers, senior executives and trade union leaders to evolve this shopfloor program. Senior executives in the plant and the head office were not against this experiment; and thought that mainly plant people would look after its execution. Of course, it neither made much demand on them nor posed a serious threat to their existing powers. The rank and file plant workers had strong allegiance to the union. But they were happy to get an opportunity to be involved through this small group (SG) activity. The middle managers as well as the trade union leaders, however, were opposed to it. Middle managers had no real power to stall the new experiment. Management tried to impress upon the union that poor productivity may lead to losses and probable job loss. But the union argued that low productivity was due to bad management, and wanted that it should be heard in all matters including HR, finance, marketing and corporate policy. The union leaders thought this kind of experiments were not needed as it already represented the workers. Brooke's radical ideas included constitution of Small Groups (SGs) made up of workers, supervisors, and middle managers, which were to be authorized to take work-related decisions; they were also provided with the money with which to implement SG decisions. He assured that collective bargaining issues were not to be affected by the proposed experiment. SGs were expected to focus on productivity, safety, quality and efficiency. When management noted the adamant attitude of the union, it offered to have another participatory tier whereby the union could be involved over the very same issues if unresolved by the SGs. After much persuasion, the union eventually budged. It was convinced that with pressure from employees below through their voice in SGs, managers were likely to behave more responsibly and perform better. The MD called a 2-day workshop of all stakeholders to discuss details. The Chief Personnel Manager, who was trained in the old adversarial school, was fired and replaced by a new Vice-PresidentHuman Resource (VP-HR), who was well-versed in strategic HR interventions. Now there was to be one SG for every section, which included all the section workers, the supervisor or manager. The SG was charged with discussing issues of work environment, productivity, quality and safety; and was given considerable autonomy. They could even decide who would chair SG meetings; but consensus was necessary for implementing a decision. Interestingly, 25 per cent of every division's budget was to be handed over to SGs for implementing their decisions. There was no requirement of any other external sanction for that. The second tier of the program consisted of 10 Shop Committees (SCs)one for each major area of activity. The SCs too were assigned 25 per cent of the division's budget. An SC was expected to discuss the same issues as SG but at a higher level. Its members consisted of nominees of the union and management in equal number, with the condition that their nominees should be employed in the section/department concerned. The MD hesitatingly gave in to the demand for constituting the SCs so as to allay any fears about the weakening potential of SGs on the union's powers, which was the key apprehension of the union. Thus, half of the division budget was to be spent by these two sets of forums. This, of course, abridged the (financial) powers of senior managers. The union was immediately up in arms, and demanded that it could nominate anyone it liked to SCs. It also promised cooperation if the union was offered parity in representation to the Board of Directors. Brookes informally agreed that a 3rd tier could be thought of later on, but no representation at all at the Board was 2 acceptable. The tier, he proposed, was of union leaders participating with the vice-presidents and the MD in policy decisions. Somehow, the union leadership felt pressure from lobbies of different informal groups within it; which influenced it to agree to the MD's two-tier scheme. SGs were asked to meet for one hour during working hours every two weeks. They began their work right away and settled down to serious discussions. Most of the early decisions of SGs were small. But problems began to surface when easy and non-controversial issues had been attended to. Issues like cleanliness, hygiene, ventilation and safety were settled without much controversy. But when core areas like work environment, quality and productivity came for discussion before the SGs, one could witness heated opposition from managers. Some workers tried to raise issues such as promotion and individual grievances at the SG as they were vitiating cooperative work environment. But they were told that interest issues were not the focus of the experiment. Workers also questioned managers on poor or wasteful manufacturing practices. The union activists especially asked the managers to display more respectful behavior with workers, and seriously look at the causal roots of quality problems, wasted materials, and machine breakdowns. Despite these, workers in general appeared highly excited about devising the SGs. But managers were now clearly seen in reactive roles. They often did not come prepared for SG meetings. This led to the emergence of 'they' and 'we' syndrome in these meetings. The middle managers were not at all enthusiastic about any such forums such as SG. Interestingly, they were unsure of their powers in the new dispensation, and did not quite know how far they could support a decision. A section chief blocked the suggestion for changing two old machines as they were breaking down more often and were causing a lot of irritation. But these machines were expensive to replace. His vice-president did not think that it was a wise decision, and suggested that the section works with the same machines. The new HR Chief had to see all this happening despite his best efforts to put life in the program. But he had got little time to do so as he had joined recently, and was trying to understand the union-management power dynamics at the company. A review after six months showed that the senior managers felt indifferent to the lower managers battling in SGs. Departmental heads, one level above section chiefs, were supposed to be on SCs, discussing with union nominees the very same issues of quality, safety, and productivity related to particular units that had passed through the SG forum without result. But only one SC had met in six months even as a number of unresolved issues at the SGs' level had piled up. The managers took no initiatives from their side and showed indifference. General Managers and Vice-Presidents expected SGs to enhance productivity, cooperation and partnership so as to lead towards building trust relations without themselves making any contribution to the process. The way things were going on, it was quite evident that Brooke's experiment of strategic HR intervention was coming to a halt. A senior manager remarked: "When you have one-man shows of this type that is bound to meet this fate." Brooke was wondering whether to abandon the SGs experiment or put life into it, knowing well that in its present state it was appearing to be as good as dead.

Questions

1. Why was the MD not willing to offer Board membership to the union representatives?

2.For what reasons did the change program come to an end; and what should MD do now?