QUESTION ONE (COMPULSORY)

CASE STUDY

The Transformation of Tana-Athi Construction

PHASE 1 CULTURE CHANGE

Background: Tana-Athi Construction employs 500 staff and is part of a European-based multinational enterprise. Its main business is the provision of specialist services to major construction projects. As istypical for the construction industry, Tana-Athi operates in a highly competitive and at times hostile and aggressive environment. Disputes between contractors and subcontractors can become bitter and frequentlyend in litigation, though there have been a number of attempts over the last decade to create betterrelationships. Just as relationships between organizations tended to be hostile, so relationships withinorganizations were also less than friendly. Up to 1996, Tana-Athi had been run by an autocratic ManagingDirector who was feared by his colleagues and who treated the company as his own personal fiefdom. Hisstyle of management was not liked and many felt that it was counterproductive but, as one managercommented, 'You didn't challenge him, you didn't put your head above the parapet, or he'd make life hellfor you.' When he retired, the parent company took the view that Tana-Athi was underperforming and that much of this was due to poor management and_*a lack of cooperation within the company. His replacementwas appointed with the remit^, to improve theperformance of the company and develop its managerialcompetency. This he did to great effect. Over a four-year period, he transformed the operation, culture and structure of the organization.

Focusing on people and performance: The new Managing Director was appointed in 1996. He had trained as an engineer at Tana-Athi but had then left and worked for a number of other companies in theconstruction industry. Construction is a close-knit industry, however, and he still knew Tana-Athi and its staff quite well. He came with a reputation as an enlightened manager who could deliver performanceimprovements. The construction industry was notorious for the antagonistic relations between the maincontractors and subcontractors such as Tana-Athi , who specialize in one aspect of the constructionprocess. The Managing Director recognized, however, that the industry was attempting to change, andconflict was being replaced by 'partnership' initiatives contractors and subcontractors working in a morecooperative and team-based manner (Burnes and Coram, 1999). The Managing Director also recognizedthat external partnerships needed internal partnerships and team working if they were to be successful. Inturn this would require a new style of participative management in Tana-Athi. Therefore, the ManagingDirector set out not just to upgrade Tana-Athi's management but to undertake a root-and branch overhaulof the company's operations and culture.

As a signal of his way of working, as a first step in creating better relationships amongst managers, he broadened out the Senior Management Team to include key staff who were not directors. In what had been a very hierarchical and status-conscious company, this was a significant change. The Managing Director knew that the staff in the company, particularly at a senior level, were experienced and competent people.He believed it was in the company's interest to retain staff rather than replace them. However, he alsobelieved that they would need to change their attitudes and behaviours and upgrade their managerial skills ifthe company was to achieve the changes he believed were necessary. His strategy for transformingthe company rested on carrying out two crucial activities in parallel: to introduce new practices and techniques into the company in order to provide a better service to customers (and thus improve thecompany's overall performance), and to change attitudes and behaviours within the company, especiallythose of managers. He did not see these as being separate activities or programmes: he saw them as beinglinked. New practices, such as customer care and customer partnering, were not mere technical exercises.They required behavioral changes and new managerial skills. Therefore, the Managing Director wanted, to create a change programme whereby any change designed to improve the organization's performance.

Whether it be new skills, new techniques or whatever, also had to promote and reinforce behavioral and culture change. The converse was also the case: any effort designed to change culture or behaviour also had to have the objective of improving the organization's performance.

Between 1996 and 2000, the company under took a series of organizational, management and staffdevelopment initiatives designed collectively to transform the organization's performance and culture. The main initiatives are as follows:

Date Event

June 1996 New Managing Director appointed

August 1996 Kaizen Phase 1

October 1996 Customer Care Programme launched

March 1997 Investors in People launched

April 1997 KaizenPhase 2

September 1997 Customer Care Programme extended to construction sites

January 1998 Construction Supervisors' new role launched

June 1998 New Senior Management Team formed

November 1998 KaizenPhase 3

March 1999 Site-based trainers appointed

June 1999 Tana-Athi culture redefined

July 1999

The Managing Director's first initiative was to introduce a small-scale Kaizenprogramme. Kaizenis aJapanese technique for achieving small-scale improvements through teamwork (Witzel, 2002). TheManaging Director saw his Kaizeninitiative as delivering four benefits: it would show the organization thatimprovements could be achieved on a quick low-cost/ no-cost basis; it would promote team working; itwould, give managers confidence to delegate to and empower their staff; and it would allow both staff and managers to acquire new skills. In a traditional company such as Tana-Athi, it was not easy to introduce newideas and new ways of working, especially where managers might perceive them as a threat. But theManaging Director made it clear he was committed to this initiative and that it had to work. Over the next few years the Kaizen approach was rolled out throughout the organization.

The next initiative, in October 1996, was a customer care programme. This was designed to engender apositive view of customers by promoting joint team working. In an industry where antagonism between customers and suppliers (contractor and subcontractors) was the order of the day, where settling disputes through the courts was almost a standard practice, it was never going to be easy to promote customer care. TheManaging Director knew, however, that the future of the company depended on working with customers tounderstand what they wanted and to give it to them. Once again, this initiative was a combination of organizational change and management development; but, much more than the Kaizen initiative, it was alsocentral to changing the culture of the organization. It began with a few key customers and a few key managers,but such was its perceived success that a year later it was extended to the actual construction sites.

Other initiatives were introduced over the next few years, including Investors in People, and a redesigningof the Construction Supervisors' role to ensure that the post-holders possessed the skills, competencies andbehaviours necessary to work closely with customers and staff under the new regime. Once again this wasdesigned to achieve a combination .of aims, including changes to working practices, the upgrading ofmanagerial competency on the construction sites, and the promotion and development of a more team-basedculture in the organization.

By the end of 1999, the Managing Director felt the company had made sufficient changes to its behavior and practices to believe its culture was very much different from when he took over in 1996. However, he felt that the new culture needed to be formalized and consolidated. Therefore, he initiated a companywide review of each manager's leadership abilities and behaviours in order to ensure they were compatible with and promoted the new culture. However, he was aware that the basic structure of the company was unchanged and that he would need to address this issue in the near future.

Required: Attempt All the following questions:

1. Explain Five determinants of successful change (10Marks)
2. Evaluate and comment upon the extent to which Tana-Athi can be said to

have adopted the Culture--Excellence approach to running its business. (10Marks)

1. The transformation of Tana-Athi appears to have taken place with very

little resistance or opposition from staff and managers.

Discuss why this should be so. (10Marks)

1. To what extent and why do you agree with the following statement:

The new Managing Director has not changed the culture of Tana-Athi but has

merely introduced a new management style. (10Marks)

1. To what extent does the Tana-Athi case support the arguments of the HumanRelations school in terms of human motivation? (10Marks)

Total (50Marks)