Read the following and answer thequestions.

Harley-Davidson*

Way back in the 1960s, Harley-Davidson had 50% of the motorcyclemarket with its

American cruiser bike. The bike rumbled at stop signs and was afavorite of blue-collar

workers and motorcycle gangs.

By the 1970s, the Japanese changed the motorcycle image with adslike, “You meet the

nicest people on a Honda.” The Japanese created a large marketfor small cycles and

encroached on Harley’s big-bike territory. The Japanesemanufacturers lowered prices to

increase market share. They were unrelenting and would happilyput Harley-Davidson out of

business. Within ten years, Harley-Davidson’s “hogs” had ameasly 3.8% of the motorcycle

market.

During the early 1980s, Harley-Davidson’s CEO Vaughn Beals andother executives

purchased Harley-Davidson to see if they could turn it around.Their challenge was enormous.

Not only did Harley have an almost nonexistent share of themarket, but dealers and bikers

disliked the company’s poor service and shoddy workmanship.

Harley’s negative reputation was well deserved. Engines vibratedwildly, the bikes

were unstable, and gaskets leaked. Half the hogs coming off theassembly line had to be

reworked. One reason quality was abysmal was that laborrelations were terrible. Labor and

management were hostile toward one another. Employee complaintsand absenteeism were

rampant. Management felt lucky when a motorcycle came off theline defect free.

One of the first things President Vaughn Beals did was asurprise. He and other top

executives visited Japan’s motorcycle factories to see what theycould learn. They discovered

the real secret of Japanese success was not technology butintelligent organizational approaches

and highly motivated employees.

After his return, CEO Beals identifies two immediate problems:labor-management

tension and lousy quality. Two longer-range problems also had tobe managed: unrelenting

competition from the Japanese and poor customerrelationships.

Vaughn Beals had a vision that Harley-Davidson could producehigh-quality

motorcycles at a competitive price. Since future improvement wascontingent upon employee

cooperation, that was where Beals started.

Beals first initiated an open-door policy. His open door gaveworkers a chance to air

their grievances and for Beals to learn about the underlyingproblems. His goal was to develop

a more participative, less hierarchical, and less adversarialworking relationship. Other

initiatives included the agreement to put a union label on allbikes. Management also

voluntarily shared financial information with union leaders.Managers and supervisors were

taught to treat workers in a humane and considerate way. Inaddition, a number of human

relations programs were undertaken, including a voluntary peerreview system, a tuition refund

program, a savings plan, cross-training opportunities,outplacement assistance for anyone who

left, a task force to improve job security, and employeeassistance programs to help with

personal or family problems.

These programs had enormous impact on Harley’s culture. The peerreview system, for

example, created a strong teamwork orientation. Another move wasto do away with the

traditional vertical hierarchy, thereby giving each employee asense of ownership in running an

efficient operation. Each plant was divided into from four toseven areas, with each area

responsible for

everything

that took place. Company-level staff jobs were cut. If staff

functions were needed, they were accomplished by the people ineach area. Employees in each

area determined the best way to set up their own work, whattheir job descriptions should be,

and what work rates were optimal. This approach applied to salesas well as production

employees.

Additional steps were to force a shallower organization chart byeliminating unneeded

levels. Quality circles were also implemented, and these becamea source of bottom-up ideas

for improving efficiency. The quality circles also proved to bea tremendous factor in breaking

down barriers between workers and supervisors.

To attack the quality problems, executives sought employee helpfor installing a just-in-

time inventory system and statistical process controltechniques. The just-in-time system

meant that raw materials arrived only as needed for currentlyassembled motorcycles. This

system produced an enormous savings in inventory. Employeecoordination with suppliers and

dealers was so good that inventory and stockrooms wereeliminated. Statistical process control

is a systematic way to monitor quality and make immediatecorrections. Harley-Davidson also

gradually invested in new technology such as robots andcomputers to aid motorcycle design

and manufacturing. As a result, dealers claim quality has goneup over 100%. They have few

warranty claims and can get needed parts right away.Harley-Davidson has improved

efficiency as well. Inventory costs are way down, the break-evenpoint is lower, and higher-

quality bikes are sold at lower costs.

To deal with the Japanese onslaught, Beals got help from theU.S. government. The

Reagan administration found that Japanese were dumping (sellingbelow cost) excess bikes in

the United States, and it responded with a five-year tariff onheavyweight motorcycles. This

gave Harley some temporary breathing room.

Customer relationships have been repaired by personal visits ofBeals and his staff at

motorcycle rallies and meetings of Harley riders. Sales managerstake a van full of hogs for

riders to demonstrate; and, unlike the previous CEO who attendedrallies in a black limo and a

business suit, Beals rides his own 1344 cc Electra Glide. Hisjeans and leather jacket help build

a relationship with customers. Harley-Davidson’s dramaticallyimproved quality has also

helped the relationship with both dealers and customers. Inaddition, the company has formed

the Harley Owners Group (H.O.G.), which now has more than 75,000members to sponsor

rides and activities for customers.

Harley is profitable again and has regained 37% of thelarge-bike market. Harley is also

becoming more innovative with new product designs. It achievednew designs through

“simultaneous engineering,” which has engineering andmanufacturing working together from

the start. This ensures that components are satisfactory for thecustomer, but also simpler and

less expensive to produce.

Although Harley experienced a miracle recovery, the future isnot so bright. Harley’s

turnaround led CEO Beals to call for an early elimination oftariffs on large Japanese

motorcycles. This was an excellent public relations move andshowed that Harley could

survive on its own. However, the Japanese stand poised to tryagain to dominate the large-

motorcycle market.

More bad news is the shrinking size of the market. Registrationsof large bikes have

dropped 25% since 1983. One strategy Harley has adopted inresponse is diversification.

Beals moved the company into unrelated fields, such asmanufacturing rocket engineers for

target drones and casings for artillery shells. He hopes thiswill forestall the gradual shrinkage

of market size for large bikes. In another move, Beals tried togain synergy by buying Holiday

Rambler Corporation, a company that makes luxury motor homes.“It makes big toys for big

boys,” says Beals – which is exactly what Harley does, so Bealsexpects Harley to do well in

that market.

Michael Oneal, “Full Cycle,”

Continental

(November 1987), pp. 20-24, Rod Willis, “Harley-Davidson comesroaring Back.”

Management Review

(March 1986).

1. Which of the categories of organizationalpractitioners, if any, did the Change Agent fit? (Chap3)
2. Which of the four competencies, if any, did the ChangeAgent possess? (Chap 3)
3. Were all of the Change Agent interventions ethical?(Chap. 3)
4. Identify the first paradigm shift, if any that theClient System experienced.
5. What was the Change Agent’s management Style? (useBlake & Mouton’s Managerial Grid)
6. Place the major characters of the Client System intheir perspective roles of the 20/50/30 Model.
7. Did the Change Agent have a defined & comprehensiveplan for change? This may include activity & commitmentplanning from the textbook.
8. Refer to the three Planned Change Models in chapter 2and identify which, if any, best identifies with the Change Agent’schange efforts.
9. Art Berg advocated risk- did the Change Agent takerisks? If so, what/how?
10. How closely did the Change Agent’s change efforts matchthe stages in Handout # 5?
11. Referencing the Five OD Stems in Chapter 1, which mostclosely resembles the Change Agent’s Change efforts?
12. If any, what were the political opportunities theChange Agent missed?
13. Referring to Handout #6, which strategies did theChange Agent ignore?
14. Referring to Handout #2, which methodologies to reduceresistance to change did the Change Agent use?
15. Referring to the Communication Model- did the ChangeAgent use the Feedback element of the model?
16. List the problems in the case study.
17. Identify as much causation as possible for eachproblem. (E.g., poor productivity may be caused by managementissues, lack of proper planning, lack of resources,etc…)
18. Was the Human Process intervention used? If so,how?
19. List one reason that the organization needs/needed tochange:
    1. Internally
    2. Externally
20. Was there, or do you anticipate resistance tochange? If so, explain who and why.
21. How did the Change Agent deal with:
    1. Resistance to change by individuals orgroups
    2. Barriers to change
22. Identify any barriers to change at both the individualand organizational level.
23. Was the Techno-structural intervention? If so,how?
24. Who was the change agent?
25. Identify several roles the change agentassumed.
26. Did the change agent use any Change Agent strategiesfrom Handout #6? Which ones/how?
27. Was the Human Resource Management interventionused? If so, how?
28. Did the change agent use any type of testing instrumentor profile survey?
29. Did the Change agent perform data collection? Ifso, which one(s)?
30. Was the Strategic intervention used? If so,how?
31. Were the interventions successful?
32. How were the emotions & concerns of the staff dealtwith?
33. What other changes or recommendations would you make?(Name at least three).
34. Did the Client System experience any QWLinitiatives?
35. Was a behavioral-science consultant used in this casestudy?
36. Was Survey Feedback employed in this casestudy?
37. Would you consider the Diagnostic relationship betweenthe Change Agent and the Client System a trustingone?
38. Did Data Analysis take place?
39. Did the Client System use the “bottom up” approach todata feedback?
40. Did the Change Agent consider the Learning Styles ofthe client system?
41. Did the Change Agent consider the Multiple Intelligenceof the Client System?
42. What temperament, as defined by Keirsey TemperamentSorter II, do you think the Change Agent was?
43. When influencing the stakeholders, which of the threemajor strategies for using power to influence others in OD, did theChange Agent use?
44. Did the Change Agent conduct career planning for theClient System?
45. Did anyone conduct mentoring?
46. Was the client system considered a diverse workforce asdefined by gender, age, race/ethnicity, disability, orculture/values?
47. Was performance feedback and/or coachingused?
48. What did the Change Agent or Client System do to managestress within the Client System?
49. Was the Client System ready for change?
50. Which of the 5 activities contributing to effectivechange management did the change Agent employ?